How far can a Home Care Package stretch?
Availing Home Care Packages
Making the decision to age in the comfort of your own home can be made easier with the availability of a greater number of home care packages. However, in order to make the most of these packages and get the best value for your needs, it is important to have a clear understanding of the rules and carefully compare the associated fees.
A Home Care Package (HCP) is a service designed to help older Australians receive affordable home care. It is specifically meant for individuals who need more advanced care than what the Commonwealth Home Support Programme (CHSP) can offer.
Many individuals prefer home care as their choice for aging, as it enables them to remain in the comfort of their own homes while maintaining their well-being. However, it is important to recognize that although it may be your personal preference, it may not always be the optimal choice.
If you want to grasp how home care can benefit you, it’s important to consider practical aspects such as the waiting times, the quality of available care, and the associated costs. Prioritizing your research by gaining a clear understanding of fees and the financial impact should be at the forefront of your checklist.
What fees apply?
There are four levels of home care packages available, with Level 4 (High care needs) being the highest. This level provides an annual budget of up to $59,593.55 for your expenses. While you will need to contribute a portion of this amount, the majority of the budget is covered by the government.
The total cost of around $1,000 per week may appear substantial, and indeed it is, but it’s important to note that not all of this amount goes directly towards covering your care expenses. In order to receive home care services, you must first select an approved provider who will oversee your care package. They typically charge management fees, which are deducted from your budget before it becomes available for other purposes. Additionally, there may be fees associated with the actual care services provided and, in some cases, the travel time of the staff involved.
Providers have the freedom to determine their own fees, which means it’s important to compare the fee schedules of different providers. Thanks to competition and recent legislative changes, the management fees have been reduced. However, it’s worth noting that you might still end up using 20-25% of your home care package funds before you begin receiving any actual care services.
How far can the package stretch?
Let’s examine a case study involving Isaac, who qualifies for a Level 4 package. Isaac has a budget of $2,169 every two weeks, which amounts to $56,400 per year. The amount he pays towards the package ranges from $154 to $597 per fortnight, based on his assessable income. The remaining portion is covered by the government.
Let’s imagine that Isaac and his family have selected a service provider who requires them to pay $434 every two weeks for their management services. This amount accounts for 20% of their overall budget. If they are charged $70 per hour for care services, the remaining budget they have might be sufficient to cover slightly less than 2 hours of care each day (this might decrease further if they are billed for travel time). It’s important to note that the provider might also impose different prices for services during peak times, weekends, or at night.
How to evaluate your options?
Ensure you’re maximising the benefits of your home care package by taking a few key steps. Begin by engaging in a family conversation to explore the support your loved ones can offer. Next, carefully assess the financial considerations involved. This is precisely where our experience and expertise can come into play. Get in touch with us to schedule an appointment or call us at 1300 550 940.
Important Information: This document has been prepared by Aged Care Financial Advisers, ABN 91 600 073 630 Authorised Representative of Lifespan Financial Planning Ltd AFSL 292892, based on our understanding of the relevant legislation at the time of writing. While every care has been taken, Aged Care Financial Advisers makes no representations as to the accuracy or completeness of the contents.
