Royal commission hears case for mandatory basic fees

The introduction of mandatory income-tested fees for home care would be positive for both the sustainability of the sector and for consumers, the aged care royal commission has heard.

Enforcing mandatory daily fees for home care would be positive for both the sustainability of the sector and for consumers, the aged care royal commission has heard.

Paul Sadler

Paul Sadler, CEO of Presbyterian Aged Care, which provides home care services to some 830 people a week, said older people who weren’t being charged the basic daily fee ended up with less money available for their care.

“We currently have a situation where not all providers charge the basic daily fee, and in some instances, not even the income tested fee, Mr Sadler told the Royal Commission into Aged Care Quality and Safety.

“And the net effect of that is actually to reduce the available funds for the home care recipient in those circumstances, so they actually have less money available for their care.”

However, he added there would have to be a hardship provision in place for people who were unable to contribute if basic daily fees were to become mandatory.

Erosion in purchasing power

Mr Sadler also told the commission there had been a “gradual but inexorable erosion in the relative purchasing power of HCP and CHSP budgets”.

Whereas twenty years ago a level four Home Care Package of $30-$35,000 would have provided about 20 hours of care, today it would only buy about 10-12 hours.

He also noted a disparity with NDIS funding, saying under the disability insurance scheme it was possible to access packages of over $300,000, and backed recommendations made in the Tune Report for a level five home care package.

“I would argue that we absolutely need a higher level of funding available to help people stay in their own homes, if that’s their choice,” he said.

Mr Sadler said with the waiting list for home care currently at 128,000, up to 50,000 extra packages would be needed to absorb demand.

Unspent funds

Asked by Counsel Assisting Timothy McEvoy about interest generated on unspent funds, estimated in recent figures released by Stewart Brown at almost $7,000 per client, Mr Sadler said the interest generated from Presbyterian Care’s unspent funds over the last year amounted to about $21,400.

That interest was considered “part of general interest income”, he said and used to support all of the provider’s aged care service operations, including CHSP and residential care.

He also said some providers accumulated unspent funds “for the proverbial rainy day” and that Presbyterian Care believed this was often in the interests of a client.

“Look, we do (hold funds) where we believe that will be in the interests of the older person and we absolutely agree that holding a contingency amount or an amount for a planned purchase makes a lot of sense, and the flexibility of the individual budget actually supports that,” he said.

Other reasons for accumulating unspent funds included consumers saving for a bigger expense like respite or equipment, or choosing not to take up a full service. Also, the assessed level of care might be higher than was needed.

“So for whatever reason there has been a mismatch between the ACAT assessed level and the level of care that is actually needed by the recipient,” he said.

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3 thoughts on “Royal commission hears case for mandatory basic fees

  1. Obviously Paul Sadler doesn’t live on a pension!

    If a pension is a person’s only income, they have no assets, are paying for food, which is becoming increasingly expensive, paying rent, have extraordinarily high electricity bills, have significant chemist costs, after paying $70 plus per week as a contribution for assistance via My Aged Care. There is nothing left to buy clothes, books, family birthday gifts, have a meal; out, buy a bottle of win, go to the theatre – like most people do!

  2. As the owner and operator of a small but successful Home Care Provider I respect Mr Sadler’s opinion and the work of his organisation, but I strongly disagree with the suggestion that the Basic Daily Fee be made mandatory. We have many Clients – full Pensioners – for whom the Basic Daily Fee would be a crushing blow. We have Clients who told us “I was about to tell MAC that I just can’t afford their Home Care Package!”

    Some of those people were simply in despair until they found us, and discovered that we do not charge them the Basic Daily Fee. By removing that cost, they no longer have to choose between having home care or paying their power bill, or their rent. Telling them they could apply for “hardship status” would only increase the stress of what is already a complex process, and risk demeaning them as well.

    Sure – if a Client pays the BDF that increases their budget for care. Some Clients do choose to do that. However we already provide 15 – 16 hours per week for a Level 4 Package, and we have some Clients receiving 18 hours – with no Basic Daily Fee. There is nothing stopping a Client from volunteering to pay the BDF and receiving extra hours of care – but in the spirit of Consumer Directed Care we make it THEIR choice; we don’t make it compulsory (ie OUR choice).

    The “gradual but inexorable erosion in the relative purchasing power of HCP and CHSP budgets” is not inevitable and it does need to stop. Providers need to be more careful of costs (no more TV ads would be a very good start) and use the savings to provide better value for their Clients. It is possible – and it does not require underpayment of Care workers. We pay our Care Workers under the national FWA Award at a step higher than we are required to pay, and certainly more than other Providers are paying in our region. The result – happy team members, a stable workforce, and excellent service for our Clients. And yes – we do comply with the Home Care Standards – as our recent full Audit from the Aged Care Quality and Safety Commission has proven.

    There are many things which could be done to improve the Home Care Package system, but making the Basic Daily Fee compulsory is not one of them.

    I am withholding my full name and the name of our organisation because I am not making these comments as a self-promotion. There will be things which the large Home Care Providers can accomplish which we cannot do. There is room – and need – for a variety of Home Care models. The key considerations should be: ensuring quality AND value (the two are not incompatible), and making information clearer for our Clients, to support their decision making and choice.

  3. I view the whole CDC experiment as a failure and a rort. In the case of our parent, we have decided to reject the level 4 package and stick with CHSP.

    Have checked out both NFP and For Profit providers but with these private providers charging BDF, means testing and the full cost of nursing, social and other support, we are better off under CHSP from the local council as a provider.

    It does mean that family members do need to take up the slack in terms of caring hours but given the continuity of care provided by the council workers, and the ability to speak to someone within minutes – when the need arises – as opposed to waiting on average 15 to 20 minutes to speak with a nurse via a contact / call centre, the choice has been an easy one.

    It will be a brave government that does away with CHSP.

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