There is a common misconception that self-funded retirees don’t receive any Government support when seeking home care services. This false belief can provide a barrier to people applying for and receiving the support they require in the home, often resulting in a health event which leads them to require permanent residential aged care sooner than otherwise expected.
The home care system is designed to ensure that people over the age of 65 can live safely in their homes as they age. Over the next two years the Government has committed $6.5 billion to funding an additional 80,000 home care packages for this purpose.
However navigating the home care system can be challenging even for those with professional expertise in the healthcare industry. For example there are many people over-65 already accessing cleaning and gardening services privately not realising that they may be eligible to access these services through the Commonwealth Home support programme (CHSP) at lower cost.
The CSHP was set up to provide low level domestic assistance that can be deployed rapidly through local councils or home care providers depending upon where you live. The service has two flat tariffs: around $5 per hour for Centrelink/DVA pension recipients and around $10 per hour for those not receiving Centrelink/DVA payments. Services covered include the installation of handrails and basic maintenance to shopping, and cleaning. A CSHP package is often a starting point in accessing services at home whilst a person is waiting for a “home care package” which provides a broader base of funding across four care levels:
Level 1 – Low needs (domestic help or meal preparation)
Level 2 – Moderate needs (social support, transport, shopping)
Level 3 – Intermediate needs (personal care, medication help)
Level 4 – High needs (showering/dressing help, nursing care)
This funding is means-tested via an income-test. The maximum income-tested fee is $33.59 for each day for each day home care is accessed, and a single person could have up to $70,000 p.a. in income before triggering the maximum income-tested fee. There is also a basic daily fee of $11.71 per day which may be charged by the provider but this seldom happens.
To see how this works take Mary for example:
Mary, who is widowed and due to her declining physical health requires help with house cleaning, showering, and dressing. She has been assessed for a level 4 home care package. Mary is a self-funded retiree with $1.7 million in a self-managed superannuation fund that she draws on for income. As a result of her financial situation, Mary will be asked to contribute $9.50 per day towards her package for each day she accesses care through the package with the Government contributing
$136.44 per day on her behalf to the home care provider. The two hours of care services provided to Mary each day enables her to remain safely in her home at low cost to her.
People approved for level 1 and level 2 home care packages need to be aware that there can be a cross-over in the care services provided by these packages and what is provided by the CSHP. In these cases some analysis needs to be applied to determine the most cost-efficient path to access the required services taking into account current and future care needs and the recipient’s income level.
For example, Jim, a self-funded retiree with has been approved for level 3 package and is currently accessing home cleaning through the CSHP where he pays $10 per hour for two days of cleaning per week (1 hour per day). Jim has annual income of $80,000 and would be required to pay an income tested fee of $33.59 for each day he is accessing cleaning services under his level 3 home care package. In this case Jim would be better staying with CSHP for his current services, paying $20 per
week as opposed to $67.18. However, if Jim’s daughter is currently providing him with personal care and in the future she wants to return to the workforce and his care needs are growing then he would be better to consider moving to the level 3 home care package as it can provide more personal care services at a capped fee of $33.59 per day that he accesses services.
At Bentleys Wealth Advisors we aim to help our clients live their best lives and for some clients this means being able to remain living safely in their home as they age. For this reason we have a dedicated aged care financial advice team that is here to help you navigate through the aged care maze.
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This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider you financial situation and needs before making any decisions based on this information. Bentleys Wealth Advisors, trading as Partners Retirement Planning & Investment Advisors, is a division of Partners Wealth Group and an authorised representative of Charter Financial Planning Limited, Australian Financial Services Licensee.
