Home care fee cap starts January 2023

The Department of Health and Aged Care has announced the level at which it will cap home care administration fees.

Following the passing of the federal government’s second aged care reform bill in October, the government has capped care management fees at 20 per cent and package management fees at 15 per cent.

As well, all exit fees are to be banned as are brokerage and subcontracting fees.

Taking to Twitter, Minister for Aged Care Anika Wells said: “The Albanese Government is prioritising *care* in Home Care Packages by capping administrative fees and banning exit fees.”

Meanwhile, a statement from Ms Wells’ office read: “Home Care Package providers will need to review their current charges and discuss and agree any pricing changes with their care recipients by 1 January 2023, ensuring they obtain informed consent for any changes.”

In the same statement, Ms Wells said: “We are committed to giving care recipients better value for money and the choice and control to shop around. 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.”

As for home care operators, Ms Wells said the government will support providers to adjust their pricing, and to set reasonable and competitive charges. She added: “I encourage providers to start planning for and talking to their care recipients about these changes now.”

The legislative reform – recommended by the aged care royal commission – followed complaints that some providers were overcharging clients and billing for unnecessary fees to lift profits.

Responding to the announcement, CEO of the Aged & Community Care Providers Association Tom Symondson said: “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 home care package is going towards meeting their own personal needs.”

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

“A win for older Australians.”

Ian Yates

Curbing the amount clients can be charged is a win for older Australians, said Council on the Ageing chief executive Ian Yates. “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,” he said.

“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.”

The changes mean that:

• care management prices will be capped at 20 per cent of the package level
• package management prices will be capped at 15 per cent of the package level
• providers cannot charge for package management in a calendar month where no services other than care management are delivered – except for the first month of care
• providers cannot charge separately for third-party services – such as brokerage, handling, and subcontracting charges
• providers cannot charge exit amounts.

COTA – the peak body for older Australians – has long advocated for reform, which it describes as “a big step forward”.

The issue isn’t just about price gouging or excess profits, it’s also about inefficiencies in how some providers operate,” said Mr Yates. “The government needs to be awake to this and make sure we’re weeding out inefficient operators who refuse to move with the times.”

The government also needs to be aware of loopholes, warned Mr Yates. “Some providers may try to get around the caps by transferring fees to a loading on hourly service fees. 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.”

It’s important, as well, that the government – with the assistance of the new Independent Health and Aged Care Pricing Authority – ensures its pricing for services is adequate, added Mr Yates, “so providers are receiving the level of subsidy that’s needed to deliver services that meet independently assessed needs.”

While Mr Yates acknowledged that the reform won’t solve all the problems in the home care sector overnight, “it will go a significant way to ensuring older Australian get more hours of the quality care they deserve.”

National Seniors chief executive Professor John McCallum said the federal government’s move to reign in excessive home care charges “is a first step to giving protection to older Australians as they wait for future reforms to set home care prices.”

Noting that some older Australians have been paying up to 50 per cent of their home care package as administration and management fees, Professor McCallum said: “That’s not affordable or sustainable and is simply wrong.”

He added: “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.”

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