Are Self-Funded Retirees Missing Out on Home Care Packages?

Many self-funded retirees may think they’re not eligible for a Home Care Package, but that’s actually a misconception. Financial status alone doesn’t determine eligibility. However, if you’re a self-funded retiree or receiving a part-pension, you’ll need to undergo an income assessment through Services Australia. This assessment helps determine any potential contributions toward your care costs, depending on the level of the Home Care Package assigned to you.

Understanding Income Testing and Contribution Fees

Once you’re approved for a Home Care Package, you won’t start paying fees until you’ve signed with a provider and are receiving services. For self-funded retirees, an income-tested care fee will be calculated by Services Australia based on personal finances. This fee reduces the government subsidy on your Home Care Package.

The income-tested fee has an annual cap that’s recalculated daily and adjusted annually. In some cases, particularly with lower-level care packages (like Level 1), the fee may exceed the government subsidy. However, if you’re assigned a higher-level package (Level 3 or Level 4), the government subsidy can cover a substantial portion of your care costs, providing significant financial relief.

Benefits of Early Allocation

Being allocated a Home Care Package can yield long-term financial benefits, even if you’re not initially receiving a government subsidy. For example, if you begin with a Level 1 package, your contributions will count toward the lifetime income-tested care fee cap. Over time, as your care needs increase, you’ll reach this cap sooner, allowing you to access higher levels of care at lower costs.

Lifetime Cap on Fees

It’s important to be aware of the lifetime income-tested care fee cap, which, once reached, eliminates further income-tested fees. This cap is indexed biannually, on March 20 and September 20, with the current limit set at $79,942.44. Any income-tested fees paid while receiving a Home Care Package also count toward this cap, even if you later transition to residential aged care.

Example of Costs and Benefits for Self-Funded Retirees

Here’s an example for a single retiree with an annual income of $75,000 and $1 million in assets, showing how fees and benefits vary based on the level of Home Care Package. Providers may also charge a daily service fee on top of the package costs.

Do You Need Home Care?

If you’re finding daily tasks challenging, home care could be an ideal support. To get started, register for an assessment through My Aged Care or call My Aged Care at 1800 200 422.

If you’re not eligible for a Home Care Package, you can still access home care services on a fee-for-service basis, ensuring you get the support you need.