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What do Home Care Package fee caps mean for me?

Home Care Package (HCP) recipients will pay less for their administration and management fees after the Government announced it will cap prices from the beginning of 2023.

<p>Home Care Package care and package management fees will be capped from the start of 2023. [Source: Pexels]</p>

Home Care Package care and package management fees will be capped from the start of 2023. [Source: Pexels]

The decision means more money is going directly towards care services and support, with some HCP clients seeing 60 percent of their package fees going towards costly management fees.

So what do these changes mean and how will they benefit you?

Less money going towards fees

There are a number of fees that you may have paid previously that you will either pay less in or not at all.

HCP fortnightly care management charges will be capped up to $70.42 (Level 1), $123.87 (Level 2), $269.56 (Level 3) and $408.63 (Level 4).

Package management fees will be capped at $52.82 (Level 1), $92.90 (Level 2), $202.17 (Level 3) and $306.47 (Level 4).

The Government views these caps as a lid on prices, rather than the amount that home care providers should be aiming to charge clients. The prices will increase with the basic subsidy each year.

Capped management fees are not the only HCP changes announced by the Government, with the following to all be implemented from 1 January, 2023:

  • Care management prices will be capped at 20 percent of the package level
  • Package management prices will be capped at 15 percent of the package level
  • Providers will no longer be able to charge for package management in a calendar month (excluding the first month of care) if no services other than care management are provided
  • Providers cannot charge separately for third-party services, such as subcontracted staff or equipment purchased elsewhere
  • Providers cannot charge exit amounts if a client moves to a new provider or no longer needs care

Minister for Aged Care, Anika Wells, says the Government is keeping their promise to older Australians.

“Aged care funding should be spent on the care of older Australians and these changes will make pricing fairer so there are no surprises on the bill and more dollars for your care,” says Minister Wells.

Aged care advocates call it a win for older Australians

Peak bodies, such as the Council on the Ageing (COTA) and Aged and Community Care Providers Association (ACCPA), have welcomed the Government’s HCP price caps.

COTA Chief Executive, Ian Yates, says older Australians will benefit from the changes as more of their money will go directly to the delivery of their care and support services.

“Quality home care is vital for older Australians and this announcement is an important step in improving care and boosting accountability and transparency in the sector,” says Mr Yates.

“Older Australians deserve to have their Home Care Package funds going directly to the care they need and deserve – not being used up on things like higher than average profits or inefficient management and administration.

“Older Australians have long advocated for this improvement and it’s fantastic that the Labor Government is delivering early on its Election commitment to implement this practical reform.”

Mr Yates says the Government must still monitor providers to ensure they do not increase fees for clients elsewhere, including hourly service fees.

“The issue isn’t just about price gouging or excess profits, it’s also about inefficiencies in how some providers operate,” says Mr Yates.

“We need full pricing transparency, and it must be compulsory for every provider, with penalties for non-compliance. Too many providers are still ignoring this obligation.”

You may not see any changes to pricing if your home care provider already charges underneath the 20 percent or 15 percent caps.

However, Minister Wells says more than 37,000 people will benefit from the removal of exit charges, making it easier to shop around for competitively priced services.

“This means more package funds will be available to meet the care needs of older Australians,” says Minister Wells.

“A reduction in administration and management charges means more money in your package to pay for help around the house, personal and clinical care, assistive equipment and other supports to stay safe and independent at home.”

The reduction of fees may keep some care recipients at home for longer, according to National Seniors Australia Chief Executive Officer, Professor John McCallum.

“High demand means there is no incentive to keep costs competitive,” says Professor McCallum.

“Some older Australians have been paying up to 50 percent of their Home Care Package as administration and management fees. That’s not affordable or sustainable and is simply wrong.

“Excessive fees can restrict people’s access to services which can not only compromise their wellbeing and safety at home but also lead to premature entry into residential aged care.”

Professor McCallum says National Seniors Australia will continue to provide feedback to the Government to ensure these changes do benefit older Australians.

Providers will have to act fast

With a strict deadline of 1 January, providers must also provide 14 days notice of any changes to their pricing.

This means you should hear from your HCP provider no later than 18 December in regard to decreased care and package management prices or the removal of third-party service and exit charges.

If your provider opts to increase any care and package management fees to reflect the new maximum prices, they must contact you directly to discuss this and ensure it is mutually agreed upon.

ACCPA Chief Executive Officer (CEO), Tom Symondson, says they will provide all necessary support to providers to deliver a seamless experience for home care recipients.

“Whilst most home care providers will not be captured by these changes, as they already charge less than the caps, these reforms will give older people who stay at home the confidence of knowing that the bulk of their HCP is going towards meeting their own personal needs,” says Mr Symondson.

“These caps also recognise the important role of the providers and allow them enough leeway to pay for the delivery of these important services.

“ACCPA will work with providers to ensure there is a smooth implementation of the new arrangements and limit the potential for disruption and confusion for consumers despite the very short time frame.”

Mr Symondson says ACCPA will communicate concerns around the “very challenging deadline” to the Government to support providers.

If you would like more information on the pricing updates, a fact sheet is available.

Will the Home Care Package price caps save you money on administration and management fees? Tell us more in the comments below.

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