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Paying to get out of home care not inducing flexibility and choice

Exit fees of up to $4000 are being charged by some providers for people to switch home care services an Australia-wide survey has revealed. 

A survey shows 75 percent of people affected by the scheme believe exit fees should be banned altogether (Source: Shutterstock)
A survey shows 75 percent of people affected by the scheme believe exit fees should be banned altogether (Source: Shutterstock)

Under the Consumer Directed Care (CDC) scheme, designed to give older people more choice and flexibility over the types of care and services they access in their own home, providers are legally allowed to charge customers a fee if they chose to leave the provider.

Pat Sparrow, CEO, Aged & Community Services Australia explains Government has allowed and regulated exit fees to cover the administration costs the provider incurs to transfer the client to another provider. “These come out of the unused portion of the home care package,” she says.

However, the survey commissioned by KinCare, one of the few in home care providers that doesn’t charge exit fees, also found 75 percent of people affected by the scheme believe exit fees should be banned altogether.

Brian Bissaker, KinCare Chief Executive Officer says the whole point of the Government’s Consumer Directed Care scheme is to deliver increased choice and flexibility, not lock-in thousands of older people into care arrangements they might not be satisfied with.

He believes the introduction of exit fees is unfair and it’s hitting our most vulnerable the hardest, at a time when they are supposed to have greater choice in selecting a care provider for the first time.

“KinCare is taking a stand against the restriction of customer choice by not charging joining, upgrade or exit fees for its in home health and wellbeing services,” he says. 

“At KinCare we understand that life and family circumstances can change at any time, and so do people’s service needs.

“As an industry, we have a huge opportunity to reshape the sector by improving the service offered to customers across Australia, so they can live richer, more independent lives,” he continues.

Ms Sparrow highlights consumers are only required to pay what is in the contract they have negotiated and agreed on with the provider. “If they believe the fees are too high they can choose another provider,” she says. “The average fee is about $417, and many providers are charging less than that, with several charging no fees at all.”

However, many customers are not aware of the extra fees. Josephine Pagano has experienced the shock of hidden fees when moving her elderly father across to KinCare’s new services this month – getting a letter from her previous provider advising of unannounced exit fees to leave the service.

“It was a blanket letter, saying there was a change in the contract, and that the provider was adding exit fees to their services,” said Ms Pagano. “When I queried the legality of this, as we hadn’t signed a new contract agreement, they said that the exit fees only applied to the new packages.”

She feels exit fees after the fact are unfair and misleading. “For a vulnerable group such as the elderly, even a $500 exit fee is too high, especially when they are on limited budgets,” she points out. 

“The new consumer choices for services are about being able to trial new providers and the services that suit you and your family. “I don’t think there should be any exit fees, as you should be able to opt out if the services no longer meet your needs.”

Ms Sparrow says Government undertakes mean testing and determines the overall amounts individuals pay to receive a home care package including daily fees and mean tested care fees. “Aged care providers work within that framework and negotiate contracts with clients which include all of the fees and charges,” she says.

“Providers are concerned to ensure the majority of funding is used to deliver direct care services. As with all services there are costs associated with such delivery that providers have to meet,” she continues. 

“These costs can vary among providers based on several factors, including location. The vast majority of home care organisations provide affordable, quality services.”

The survey follows the implementation of the Government’s home care packages reforms on 27 February this year.

Conducted by OmniPoll it comes at a time when the Federal Minister for Aged Care, Ken Wyatt is due to convene a round table on exit fees from Aged Care providers. The Australian Securities and Investments Commission plus other key figures are expected to provide advice to the government on the issue of fees and financial arrangements in aged care.

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