Understanding home care costs: How much do you have to pay?

Moving into an aged care facility can be a daunting prospect, but it’s not the only option for older Australians who’re struggling to cope on their own at home.

The government provides financial subsidies to help people remain in their own homes for longer so, instead of moving away from a property and community they know and love, your elderly parent or loved one can remain under the same roof with the help of a Home Care Package (HCP).

A HCP allows you or your parent to organise a carer to come to their home a set number of times per week to carry out everything from basic chores to helping them go shopping, with personal hygiene and even managing health conditions (you can read more about the services available under a HCP here).

But you will no doubt have some questions, such as ‘How much does this all cost?’ and ‘Will my parents be able to afford it?’. Some of the information available about home care costs can be confusing, so we have pulled together the necessary facts to help you organise the best care for your loved ones.

Will the government help with home care costs?

While there is a cost involved, your parent or relative are unlikely to have to fork out a bucketload to receive the help they need, as the government will contributes toward the cost, via what’s called a HCP.

How much the government will cover depends on the level of care your mum or dad requires, and how much personal wealth they have. My Aged Care, the government’s one-stop-shop for all aged care information and funding, is your first port of call when applying for a HCP. We explain how to get started with My Aged Care here.

My Aged Care will arrange for your loved one’s needs to be assessed, at which point they will be assigned a level from one (requiring the lowest amount of care) to four (having substantial care needs). It will also be advised at this point if their needs are too high for home care, which may mean aged care is the only suitable option.

For those assessed as being within the lowest tier (level one), the government will provide a HCP work approximately $8,750. This amount increases as the level of care goes up, with those assessed as level two receiving a HCP worth about $15,250. For level three, the amount currently sits at $33,500, while level four rounds out at around $50,750.

These funds won’t be paid to your loved one directly, however. Instead, they will be paid to the relevant home care provider. This means that the money isn’t classed as income, so won’t affect any Age Pension allowances.

What extra home care costs may come up?

As well as the cost of care itself, some home care providers charge what’s called a Basic Daily Fee (BDF), which isn’t income-tested and can be equivalent to as much as 17.5 per cent of the basic Age Pension received by a single person. The current maximum BDF amount is $10.63, which is charged for every day your parent holds a HCP, not every day a service is actually received.

How much your mum or dad is charged again depends the level of HCP they’ve been assigned: $9.52 for level one, $10.07 for level two, $10.35 for level three and $10.63 for level four. Not all home care providers charge a BDF, however, so it’s important to ask whether that’s the case when choosing a service.

Are home care packages income-tested?

The income-tested care fee is an extra contribution toward the cost of care services that some HCP recipients must pay. The fee t varies depending on the amount of income your parent has.

For singles with an income of more than $27,463.30, members of a couple living together with income of more than $21,294 or members of a couple living apart due to illness on more than $26,943.80, the amount paid can be as much as $15.24 per day.

For singles with an income over $53,060.80, members of a couple living together on $40,586-plus or members of a couple living apart due to illness on more than $52,540.80 the amount increases to between $15.25 and $30.49 per day. Full Age Pensioners are exempt from income-tested payments.

If you want to work out exactly how much your mum or dad will have to pay, the government’s My Aged Care calculator tool is a handy option.

If your parent or loved one finds they are struggling to pay their income-tested fees, the government also offers financial hardship assistance that may help cover those costs.