Have you recently been approved to receive a Home Care Package but are feeling a bit lost with that Income Assessment Test? Are you also wondering if you’ll need to dip into your savings to pay for care? You’re not dealing with this alone! Many Australians find themselves puzzled by the complexity of aged care fees and assessments. The Income Tested Care Fee often causes particular anxiety – but understanding how it works doesn’t have to be stressful.
Whether you’re exploring care options for yourself or a loved one, this guide will explain everything you need to know about this important aspect of Home Care Packages, helping you make informed decisions about your care journey with confidence.
What is The Income Tested Care Fee For Home Care Package?
The Income Tested Fee is an extra payment that some people may need to pay towards their home care and services based on their income assessment. This fee ensures that the home care package system remains sustainable and equitable for all Australians.
Think of it as your personal contribution to your care, which works alongside the government’s contribution to create your total home care package budget. Not everyone pays this fee. Your obligation depends on your income. People with extra income or assets may need to pay this fee.
What Fees Do I Have to Pay to The Home Care Provider?
Your contribution to your Home Care Package provider may include the following fees: There are four levels of Home Care Packages, each with a specific amount of government-subsidised funding.
- Basic Daily Fee: A standard daily fee that providers may charge to all Home Care Package recipients and is set by the Department of Health and Aged Care. Some providers choose to waive this fee.
- Income Tested Care Fee: An extra fee based on your income level. This contribution may apply if you have income above certain thresholds and helps supplement your Home Care Package budget.
- Additional Service Fees: These are costs for extra services beyond what is covered in your Home Care Package. They are optional and paid directly by you if you choose extra services.
Worried about your Home Care Package costs? We’re here to help. Contact us today for a clear breakdown of fees and explore financial assistance options to ensure you get the care you need.
How do I Know if I Need to Pay an Income-Tested Care Fee?
You can use the fee estimator provided by Services Australia to determine if you need to pay an income-tested fee and to estimate the potential amount. This online tool gives a quick estimate based on your current financial situation, including income and family status.
If the estimator shows that you may need to pay this fee, you’ll need to complete an income assessment. This formal assessment provides the exact fee amount you’ll be required to contribute. For more detailed information about income assessments and eligibility, you can use the Income and Means Assessments tool available on the Services Australia website.
How is income assessment for home care conducted?
An income assessment for home care is conducted to determine if you need to pay an Income Tested Care Fee for your Home Care Package. Here’s how it works:
- Submit Your Financial Information: You provide details about your income, including pensions, superannuation, investments, and any other earnings. This information helps assess your ability to contribute to your care costs.
- Assessment by Services Australia: Services Australia reviews your financial information and calculates whether you’re required to pay an Income Tested Care Fee. They consider only your income (not your assets) to determine your contribution.
- Receive Your Fee Notice: After the assessment, the home care recipient will receive a notice outlining the amount of your Income Tested Care Fee, if applicable. This notice includes daily and annual caps, so you know the maximum amount you may need to pay.
Who Does Not Pay an Income Tested Fee?
Not everyone is required to pay the Income Tested Care Fee. Generally, the following individuals are exempt:
- Full Pension Recipients with No Additional Income: If you or your partner receive only the Age Pension and have no other income sources, you are exempt from the Income Tested Care Fee. In this case, your home care services are fully covered by the government.
- Individuals with Minimal Income or Assets: For those with very low incomes and no additional assets, the Income Tested Care Fee will typically not apply.
- Verification: If you’re unsure about your obligation, you can request a Fee Advice Letter from the Services Australia Aged Care line at 1800 227 475 or from the Department of Veterans Affairs (DVA) at 1800 838 372. They can confirm your status based on your financial information.
- Changed Financial Circumstances: If your income or assets haven’t been updated in the past two years, or if your financial situation has changed, contact Services Australia or the DVA to ensure your fee obligations reflect your current circumstances.
By understanding the financial implications of the income tested fee, you can receive the highest quality of care within the available resources. Contact us now for a comprehensive explanation of your Home Care Package costs.
How Much Do You Need to Pay for the Income Tested Care Fee?
The Income Tested Care Fee you might need to pay depends on your income level and household situation. Here’s a breakdown based on different income thresholds:
1. If Your Income Falls Within the Lower Threshold:
Older Australians who have low income below $18.77 per day won’t be asked to pay any Income Tested Fee.
2. If Your Income Exceeds the Medium Threshold:
You could pay up to $18.77 per day if your income falls above these amounts:
- Single: Annual income over $33,735.00
- Couple Living Together: Individual income over $26,109.20
- Couple Living Apart Due to Illness: Individual income over $33,059.00
These amounts apply if your income is above this threshold but remains below the higher bracket.
3. If Your Income Exceeds the Higher Threshold:
If your income is in the higher range, you may pay between $18.77 and $37.55 per day:
- Single: Annual income over $65,020.80
- Couple Living Together: Individual income over $49,691.20
- Couple Living Apart Due to Illness: Individual income over $64,344.80
Once your income reaches these higher thresholds, the daily fee increases to reflect the additional funds you have available. As of September 20, 2024, the maximum income tested care fee that an individual may be required to pay for income-tested care fees over their lifetime is capped at $82,018.15.
These fees contribute directly to your Home Care Package budget, increasing the amount available for care services based on your contribution level.
Note: If your financial situation changes while receiving care, your income-tested fee may also change. For more information, please visit the Changes to aged care fees page.
What happens if I decide not to disclose my income details?
If you decide not to disclose your income details when applying for any Home Care Package level, you will be required to pay the maximum applicable fees. This means you’ll be charged both the basic daily fee and the maximum income-tested care fee until you reach the annual or lifetime cap. These caps are in place to prevent fees from exceeding a certain amount over time, but without an income assessment, you’ll automatically be assigned the highest fee rate, regardless of your actual financial situation.
To avoid paying more than necessary, it’s beneficial to provide your income details and undergo the assessment. This way, your fees are calculated based on your actual income, and you may qualify for lower fees or exemptions based on your financial status.
Read More: What is Charter of Aged care Rights?
How is the Income Tested Fee calculated?
The Income Tested Care Fee is calculated at a rate of 50% of income over the income-free area (IFA), specific to each person’s situation. This means that only a portion of your income above the base amount is considered in the fee calculation. The fee estimator or a formal income assessment will provide a clear estimate.
There are caps on the amount of income-tested care fees certain people can be asked to pay. Once these caps are reached, the government will cover all fees for the individual.
- Full pensioners, or those with equivalent income, do not have to pay any income-tested care fees.
- Part-pensioners and individuals with equivalent incomes have their income-tested care fees capped at $5,000 per year.
- Self-funded retirees have their income-tested care fees capped at $10,000 per year.
At ease with your care fees? If not, we’re ready to help. Get in touch today to talk to our team about how we can simplify your Home Care Package fees and access financial assistance options.
What if I Can’t Afford the Home Care Fees?
If you’re unable to afford your home care fees due to circumstances beyond your control, you can apply for financial hardship assistance.
This assistance may help cover your basic daily fee and/or income-tested care fee. If approved, the Australian Government may pay part or all of these costs on your behalf. However, financial hardship assistance does not cover any additional service fees you choose to pay for extra services.
Summing Up!
Understanding the Home Care Package system and the Income Tested Care Fee doesn’t have to be overwhelming. Remember, this fee is designed to ensure fairness in the aged care system while making sure you receive the care you need. Whether you’re exempt from paying, fall into one of the payment thresholds, or need to seek financial hardship assistance, there are options available to support your circumstances. The most important step is to complete your income assessment promptly and seek help if you’re unsure about any aspect of the process. By understanding your obligations and available support, you can focus on what truly matters – receiving the quality care you deserve in the comfort of your own home.
For guidance or any other questions about your Home Care Package, contact us today. Our team is here to help you understand your options and make informed decisions for your care journey. Reach out to us for personalised support and assistance.
