“Older Australians will be asked to contribute, if able, to the cost of their care…” (The Government)
If you have recently applied for an ACAT Assessment, you may or may not have seen the very fine-print concerning a topic referred-to as ITF = Income Tested Fee.
The ITF is how the government designates who will contribute to the cost of their care.
If you are granted a Home Care Package, you may need to contribute to the cost of the care, with an income-tested ‘fee’. If you -or your loved ones- are Self-funded Retirees, a DVA card holder or part-pensioner; it is likely you will need to submit an income assessment. It’s important to note, it’s about ‘income’ not your assets…
An income assessment determines if you need to pay this ITF fee.
Here is some information from the My Aged Care Website:
The income-tested care fee is an extra contribution that some people pay, as determined through an income assessment.
This fee is different for everyone. It’s based on your individual income, including your pension. However, full pensioners and people with an income up to $28,974.40 do not pay an income-tested care fee.
You could pay up to $16.15 per day, if you:
- are single earning over $28,974.40
- are a member of a couple living together earning over $22,471.80
- are a member of a couple living apart due to illness earning over $28,454.40
You could pay between $16.15 – $32.30 if you:
- are single earning over $56,035.20
- are a member of a couple living together earning over $42,868.80
- are a member of a couple living apart due to illness earning over $55,515.20
These amounts change with indexation on 20 March and 20 September every year and are up to date as at 20 March 2022.
Your income-tested care fee is calculated by Services Australia [Centrelink]. This fee will reduce the subsidy the government contributes towards your Home Care Package.
How do I know if I need to pay an income-tested care fee?
You can use the My Aged Care fee estimator to find out if you need to pay an income-tested care fee and get an estimate of what the amount might be.
If you have to pay an income-tested care fee, you may need to complete an income assessment to find out the exact amount.
To wrap the above information up with a practical action: download the formal assessment document called the SA486 document. It is 26 pages long; and seems fairly daunting if you’ve not had anything to do with Centrelink before… but it is necessary. One way to make digesting this 26-page document more palatable, is to call Services Australia (Aged Care department) on 1800 227 475. After the 20-minute wait; I found them to be very helpful to understand the requirements.
Recently the government revised how it will collect the ITF from HCP Program recipients.
From 21 September 2021, all Home Care Package Providers, such as Prestige Inhome Care (whom I work with) are charged the maximum ITF of $32.30 per day until the assessment is finalised and a formal letter from Services Australia is sent (advising an amount between $0 to $32.30).
Therefore, until the letter arrives, the government charges the provider, who will need to recoup the fee from you via a monthly payment from your bank account or credit card.
The ITF process can seem unfair.
If you have been ‘assigned’ a Level 1 or 2 Home Care Package [HCP], it can actually feel that the whole process is unfair.
Let me explain:
You have done your ACAT assessment and have received the letter advising you have (finally) been assigned a Home Care Package Level 1 or 2;
You have submitted your Paperwork to Services Australia; and they have advised you are required to make an ITF contribution.
This is where you need to weigh-up whether it is worth taking-up the Home Care Package…
If your ITF contribution equals the maximum amount of $32.30 per day; the Home Care Provider will need to take this fee from your bank account on behalf of the government, and as part of your HCP package. Fortnightly, this will total 14 days x $32.30 = $452.20 per fortnight.
The full amount from the government, and before any fees which the provider needs to charge is:
HCP Level 1 = $346.22 per fortnight, less fees*@22-23% = $259.32 per fortnight;
HCP Level 2 = $609 per fortnight, less fees @22-23% = $459.80 per fortnight.
From the above quick calculations, the (maximum) Income Tested Fee can exceed the cost of the 4-8 hours of care serviced by your provider.
You may consider that it’s not worth taking up the Home Care Package until you receive a Level 3HCP; and you may come to the realisation that it’s more convenient and less arduous to appoint a provider to provide your services privately. i.e. pay an in-home care provider to organise care for you, and pay them directly.
Some good news is still to be found:
If you are assessed and your ITF a a relatively small amount per day (from $4.27 to $11 per day / $59.78 to $154 per fortnight ) then the Home Care Package Program will work in your favour.
Allow me to share the current fortnightly package, fees and approximate number of hours of care per fortnight, as provided by the In-Home Care Provider I work with: Prestige Inhome Care Sydney. (accurate @ 20 September 2021)
If you need more clarification on this issue and if you live in Sydney, drop-in to visit me in Neutral Bay on any Friday morning at 165 Military Road, Neutral Bay NSW 2089 where I host a morning information session on Aged Care topics and can assist you in applying for an ACAT Assessment.
Further information can be found on the My Aged Care Website. Search: Home Care Package Fee Estimator.
For further explanation, call Services Australia Aged Care direct information line: 1800 700 600 or ask OPAN to guide you: www.opan.org.au