Home care packages
What SMSF trustees should know around retirement.
Home Care Packages have been introduced to help people stay in their home longer and give them choice and flexibility in the way they are given care and support.
To receive services under a HCP a Home Care Agreement must be drawn up.
The services provided under HCA's are split into four levels:
- Level 1 support for people with basic care needs
- Level 2 support for people with low level care needs
- Level 3 support for people with intermediate care needs
- Level 4 support for people with high level care needs
The range of services offered under a HCA include:
helping with personal requirements such as showering, bathing, dressing and mobility,
assisting with general household functions such as washing, ironing, housecleaning, gardening, basic home maintenance, home modifications related to care needs, transport for shopping and visits to doctors and social activities, and
providing medical based assistance such as nursing and other health support such as physiotherapy, hearing and vision services.
Where extra services and care are needed, such as dementia and cognition support or supplementary oxygen for medical reasons, they are available through the home care provider.
Eligibility for a home care package
To receive home care assistance an assessment must be made by a member of an aged care assessment team or an aged care assessment service. As a part of this assessment a package will be offered by a home care provider that addresses the needs and requirements of the person or couple applying for the assistance.
Once the assessment has been carried out and a person or couple are eligible for the package they will be put in touch with home care providers in the area. As a part of working out the HCP the Home Care Provider will enter into a Home Care Agreement that sets out what care and services will be received.
Fees payable under a HCA
There are two types of fees payable under a HCA. There is a basic fee and an income tested fee. The basic home care fee has been set at 17.5% of the basic age pension. Currently the basic home care daily fee is $9.77. As pensions increase twice each year, in March and September, the basic daily care fee will increase as well.
The basic home care fee is paid by everyone, and then there is an income tested fee where the amount paid depends on the income earned. There has been protection built into the new system so that both the basic fee and the income tested fee are capped. The income tested fee is applied at two income thresholds. Where people earn income below the first threshold no income tested fee is paid.
The first income threshold is currently $25,316.20 for a single person, $19,653.40 each for a couple living together, and $24,848.20 each for a couple seperated due to illness. Where income is above this first threshold, but is below the second threshold, there is a limit ob the annual income tested fee of $5,106 a year.
The second income threshold is $48,942.40 per year for singles, $48,474.40 per year for a couple separated due to illness, and $37,460.80 each for couple living together. Retirees with income above a second threshold have a higher annual limit on their daily fee of $10,211. Both the lower limit and higher limit increase each year in line with indexation.
The amount of income tested fee payable depends on three factors. They are
- the actual cost of the home care package,
- whether they are eligible to receive the age pension, and
- whether the income results in them receiving no age pension.
For people with income between the first threshold and the second threshold the income tested daily care fee payable will be the lesser of the actual cost of the home care package, half of their income above the income threshold, or $14.02 per day which is the lower limit of $5,105.74 divided by 364.
The income tested daily care fees for people with income above the second threshold will be the lesser of actual cost of the home care package, the fee calculated by adding half of their income above the income threshold to $14.02, or $28.05 per day which is the higher limit of $10,211.48 divided by 364.
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