New ‘clarion call’ for providers, consumers to maximise package use

Managing unspent funds in home care packages continues to be on ongoing issue for providers ahead of the February 2017 changes with new data showing up to a quarter of some packages has not been spent.

Managing unspent funds in home care packages continues to be on ongoing issue for providers ahead of the February 2017 changes with new data showing up to a quarter of some packages has not been spent.

Accounting firm StewartBrown urged providers to implement strategies to reduce current levels of unspent funds and minimise the impact of the February 2017 changes where accumulated funds will move with the client or be returned to government.

The financial performance survey, which collected data from 400 home care programs in the March quarter, showed average unspent funds ranged from 24 per cent in lower level packages to 8 per cent in higher level packages.

However, the firm said there were positive signs providers were taking steps to respond to the new treatment of unspent funds from next year, with revenue utilisation rates from packages improving on the previous quarter.

Patrick Reid
Patrick Reid

Patrick Reid, director of aged care, community and disability with StewartBrown, said substantial unspent funds were a concern because of the impact on the profitability of providers and ability of consumers to benefit from necessary services.

Mr Reid said a consumer attitude of ‘saving for a rainy day’ meant clients were not maximising their package according to their assessed need.

“This is really a clarion call for both consumers and providers to review the services that they are providing or receiving and making sure they are maximising the package before February 2017,” he told Community Care Review.

From next year, any unused funds will need to be returned to the consumer or government when a person permanently leaves their package. In the event a client switches providers, any unspent package funding will also move with them.

Previously, many providers relied on the retention of unspent funds as a source of revenue, which will no longer be the case from February 2017.

Revenue utilisation across Stewart Brown surveys
Revenue utilisation from packages across StewartBrown surveys

“The changes to the rules should certainly motivate providers to encourage care recipients to utilise more of their package. This should benefit the care recipient and it should also benefit providers as this will make a greater contribution to the recovery of fixed overheads,” said the home care report update released last week.

Significant levels of unspent funds coupled with poor consumer uptake of Level 1 packages could have substantial financial implications for some home care providers, Mr Reid said.

According to the survey data, low-level packages are underutilised, with Level 1 packages averaging 76 per cent occupancy.

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Tags: finance, home-care-packages, stewartbrown, unspent-funds,

5 thoughts on “New ‘clarion call’ for providers, consumers to maximise package use

  1. For me, this quote sums up the situation: “The changes to the rules should certainly motivate providers to encourage care recipients to utilise more of their package. This should benefit the care recipient and it should also benefit providers as this will make a greater contribution to the recovery of fixed overheads,”

    If it is of benefit to care recipients for them to utilise more of their care package then providers should ALWAYS have been encouraging that. Unspent funds have been accumulating at high levels because that was better for the providers.

    Providers have been squirrelling away funds for their OWN rainy day – and pretending it was for the benefit of their Clients. Sure – from time to time a Client did get to benefit from a pool of unspent funds, and examples are trotted out as justification for a bad system, but by far the biggest beneficiaries of all were the Providers themselves.

    Now the rules are changing, and Providers don’t get to keep the cash – so suddenly it’s all spend spend spend!

    This is an entertaining twist on the old “Use it or lose it” principle and it certainly shows how warped the Home Care Package system had become, with funds used for the benefit of the industry, rather than for the benefit of the people whom the industry exists to serve.

    The changes are long overdue.

  2. Just wanting to clarify how the provider will be impacted if they haven’t reduced the unspent funds post 27 Feb 2017. They will miss out on the margin they make on services/supplies provided to the consumer if the consumer exits their service shortly after the introduction of the new legislation. The provider can only deduct their published “Exit Fee” from the unspent funds before having to refund the balance.

    I totally agree with David regarding the monitoring of the consumer’s funds and making sure their package is being utilised in accordance with their needs. Come Feb 2017, if the provider isn’t keeping the consumer happy, they will leave and take their package with them to another provider.

  3. currently the lack of a range of packages can also mean that while low level packages are available while there is a complete lack of high care packages, so many are on inappropriate packages and what they can supply. This can result in people not being able to use these packages for appropriate tasks that are required for the person. This results in many struggling to get what is required while the package is not utilised to its full capability.

  4. I use most of my funds , unfortunately I have a surplus that I can’t use because of restrictions placed by the government on certain items, example this winter my heating system packed up costing $3100, I was not able to use funds it under this system, it does not come under certain regulations that is mindboggling to understand. Consequently I am left to beg from family or freeze in my home.

  5. My toilets system broke down, i was not allowed to use my funds to fix because it does not come under certain category that is hard to understand, yet the government wants me to stay at home, where do i find the money, plumbers are so expensive

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