Since February 27, 2017, consumers have had the freedom to shop around for the best deal when it comes to home care.
But what is a good deal and how do you know when you’re getting one?
More than 1, 000000 older Australians receive some form of home care, with many dipping into their own pockets to fund it. Over 80,000 Australians are recipients of a government-funded ‘Home Care Package’, with this number set to increase to 140,000 over the next 5-7 years.
Changes to Consumer Directed Care mean that those receiving home care packages will have the freedom to shop around and get the best deal. However, with many consumers in the dark about Consumer Directed Care, and little understanding of what they are currently paying their provider, how do you determine whether you are getting a good deal?
And, for those that have the means to pay privately, how do you make the decision to do so?
We’ve created this guide to take you through the steps to determine what’s a good deal for you and your circumstances.
Before you begin, make sure you understand the changes to Home Care Packages
A Home Care Package is an annual budget that you can use to access services to help you live independently.
Historically, these packages were provided to consumers via approved home care providers.
That meant that once a consumer was assessed by My Aged Care and allocated a package, they would be referred to approved providers in their local area and would be required to contact each of them until they found a provider with an available package.
Since February 27 2017, a Home Care Package is attached to an individual, not a provider. Once someone is allocated a package by My Aged Care, they will still need to choose a provider to administer the funds – however, the big difference is that they can now choose a provider based not on whether they have a package available, but on what they can offer to the consumer.
Step 1: Understanding Home Care Package funding
Your yearly Home Care Package budget is made up of an amount that you will be asked to contribute (which is means-tested), in addition to a subsidy from the government.
There are four levels of Home Care Package (based on your need). The level determines how much funding you have available for care.
Level 1 – Yearly government contribution of approximately $8,800 per year.
Level 2 – Yearly government contribution of approximately $15,500 per year.
Level 3 – Yearly government contribution of approximately $33,700 per year.
Level 4 – Yearly government contribution of approximately $51,100 per year.
It is important to remember that the hours of care you can receive with your package is not a set amount – rather, it is determined by how you choose to spend the budget that has been allocated to you.
Step 2: What’s your personal contribution?
Your personal contribution could be made up of the following fees:
- Basic daily fee – an amount that everyone can be asked to pay.
- Income-tested care fee – an additional amount that people earning over the maximum income for a full pensioner can be asked to pay.
The basic daily fee
The basic daily fee of the different plan levels is as follows:
- Level 1 – $9.52 per day or $133.28 per fortnight
- Level 2 – $10.07 per day or $140.98 per fortnight
- Level 3 – $10.35 per day or $144.90 per fortnight
- Level 4 – $10.63 per day or $148.82 per fortnight
Income tested care fee
Aside from the basic daily fee, the additional amount that you will be asked to make up of the above budget is based on your income and whether you are single or a couple.
- If your income is less than $53,060.80 a year, but more than $27,463.80 a year, you will be asked to contribute up to $15.24 a day.
- If your income is more than $53,060.80 a year, you will be asked to contribute between $15.25 – $30.49 a day.
- If your combined income is less than $40,586.00 a year, but more than $21,294.00 a year, you will be asked to contribute up to $15.24 a day.
- If your combined income is more than $40,586.00 a year, you will be asked to contribute between $15.25 – $30.49 a day.
Couple separated due to illness
- If your combined income is less than $52,540.80 a year, but more than $26,943.80 a year, you will be asked to contribute up to $15.24 a day.
- If your combined income is more than $52,540.80 a year, you will be asked to contribute between $15.25 – $30.49 a day.
The maximum amount of income-tested care fees for home care you can be asked to pay is:
- $15.24 per day or $5,550.90 per year for people with income below $53,060.80 (Single person income rate)
- $30.49 per day or $11,101.81 per year for people with income above $53,060.80 (Single person income rate)
The maximum income-tested care fees and means-tested care fees you may be asked to pay in your lifetime is $66,610.90.
Importantly, the amount you contribute is the same, regardless of the level of your home care package.
It’s also important to note that the government is allowing providers to waive the basic fee of $10.32 a day – so part pensioners can pay nothing. Some providers are already putting this into practice, so you should make sure you ask the question when you’re shopping around. Note that this should not impact your overall budget, which should remain the same.
Step 3: Deciding whether to pay privately
The reality of Home Care Packages in Australia today is that the need far outweighs the supply – for some, it may be worth choosing to self- fund your home care to avoid joining the Home Care Package waiting list.
For example, if you are assessed for a Level 2 Package and are a self-funded retiree, the amount that you are asked to contribute might make up the majority of your daily package; over the course of a year, you will be asked to contribute over $10,000 of the yearly $14,000 budget.
It is worth considering the amount you will need to contribute, the urgency of your need as well as the other fees and administrative necessities that come with a Home Care Package before deciding between taking one up, or paying directly.
4.1 Understanding provider fees and charges
As we mentioned above, after February 27, once you are assessed for a Home Care Package you will be placed on a government waiting list. Once you are allocated a package, you will still need to choose a provider to administer the funds for you – and they will charge a fee to do this. Now that consumers have the power to choose, many providers are lowering their administration and case management fees – which historically could have been as high as 40-50% of a total home care package. After February 27, savvy consumers may be able to find a provider to simply administer their funds for as little as 10%.
4.2 Do you also need ‘case management’?
For some, advice about what services they can and should access is an important part of accessing home care, while others are more comfortable to self-direct their services. Many providers are recognising this individuality and instead of charging a flat ‘case management fee’ (which historically could be as high as 30% of your package), are introducing ‘tiered’ options for client advice, with different price points, depending on how much support you need.
Ensuring you are only paying for the advice you need will help to stretch your home care package further.
Step 5: Using innovative options like Mable
Once you have found a provider to administer your funds, or made the choice to pay privately, it’s time to start thinking about where you can access your services from. Traditionally, those with a Home Care package would access their services through the provider, who charge up to $50 an hour.
Mable.com.au is Australia’s number one online marketplace for self-directed care and support. By finding and hiring care workers directly through the Mable platform, people can choose what services they want, who comes into their home to provide those services and what they should pay for those services.
It’s simple maths…
By working with a progressive provider to manage funds and hiring care workers directly through the Mable platform, clients are finding they can access many more hours of care and support each week – some doubling the care they can access with their existing packages.
Care Workers on the Mable platform are independent and set their own rates – but on average charge around $35 an hour. Consumers who have had their services supplied directly through their provider may have been paying anywhere between $40-$50 an hour – while care workers are often paid $25 or less.
Unlike traditional agencies, its low overhead model based on connecting consumers and workers directly allows savings to be shared, so that consumers pay less, while care workers can earn more.
It’s not only about the money….
Consumer directed care is not only about saving money, it’s about enabling Australians to think about aged care in new and creative ways. Here are some creative ways the clients are using the Mable platform.
Jack’s care worker Lisa helps him to maintain a close connection with his sister. Together, the three regularly take the time to do something enriching, like visit the Art Gallery of NSW.
Following an illness, Janice engaged her neighbour through the Mable platform to provide housework duties. The choice has meant more of her funding can be spent on support that contributes to her health and wellness.
For Paul and Alfonso, finding a care worker who’s the right match is just as important as the care they’re delivering. With mable.com.au, they could target their search to care workers who have experience working in LGBTI communities.
Care worker Shane provides technology training for ageing clients and works with Alan to help him learn how to use his tablet and work with apps that help to make his life easier.