Below is an article explaining the subsidy amounts and costs that are involved when you accept a Australian Government Funded Home Care Package.

In 2012 The Federal Government’s Living Longer Living Better aged care reforms identified the need for more choice and flexibility for people receiving care at home. Since then there have been a series of changes to health care. One significant change has been the orientation of service delivery to Consumer Directed Care (CDC) in the Home Care Packages Programme.

The next big change is occurring on the 27th February 2017. From this date Funding for Home Care Packages will be allocated directly to the consumer, giving them more choice and control in the type of care they receive and which provider delivers the care. This means that people receive a package of approved care as before, but now they are able to allocate an Approved Provider to look after the package. The packages will be portable, meaning consumers can change their Provider whenever they want. This could be through being unsatisfied with their current provider or through moving location. Everyone who has a package will need to have their package with an Approved Provider; you are unable to manage the funds yourself.

Another change is that prior to 27th February 2017 everyone being assessed for a Home Care Package were either assessed as High Care or Low Care. In future each people will be assessed as Level 1, Level 2, Level 3, or Level 4. The funding they will receive differs for each level (see subsidy table below)

The following information is useful for consumers who now have a greater choice and control of their package of funds, it outlines the 5 different costs that you need to consider when shopping around for the Approved Provider that most suits you.


The 5 different costs explained:

Basic Daily Fee

Everyone taking up a Home Care Package can be asked by their Approved Provider to pay a Basic Daily Fee. This fee is then added to the government subsidy amount and contributes to the pool of funds you have to pay for services.

The maximum basic daily fee for a Home Care Package that an Approved Home Care Provider may charge is $10.10 per person per day (from 20 March 2017 to 19 September 2017). This rate increases on 20 March and 20 September each year in line with changes to the Age Pension. This applies to each person receiving a Home Care Package, even if you are a member of a couple. The maximum cost equates to 17.5% per cent of the pension.


The Basic Daily Fee is not a compulsory charge and can be negotiated with your Approved Home Care Provider. For example, Approved Provider Better Living Homecare will only charge this fee if there are insufficient funds available in the package to meet all of the customers’ needs as outlined in their care plan. An example of this is when meal delivery services are involved. Some Approved Providers charge the basic daily fee to all clients. It is worth asking all Approved Providers whether they charge this fee to all of their clients.


Government Subsidies

There are four levels of Government assistance available to people over the age of 65 following an assessment by an Aged Care Assessment Team:

  • Level 1 – basic care needs
  • Level 2 – low-level care needs
  • Level 3 – intermediate care needs
  • Level 4 – high-level care needs.


From 27 February 2017, you will be approved for one level of home care package. You will be prioritised for care based on your assessed need. Each level of home care packages provides a different subsidy amount. This amount is paid to your selected Approved Home Care Provider. The subsidy contributes to the total cost of your services and care delivery. It is expected that you will contribute to the cost of your care where your personal circumstances allow. See below for further information.


Current Government Subsidies for the different Home Care Package levels before any additional subsidies are added or costs taken out are:
Per Annum Weekly
Level 1 $8,135 $156.45
Level 2 $14, 768 $284.55
Level 3 $32,530 $625.59
Level 4 $49,456 $951.09


Income tested fee

Depending on your income, you may be asked to contribute more to the cost of your care. This extra amount is known as an ‘Income Tested Fee‘. This fee is not set by your Approved Provider and is not negotiable with your Approved Provider.


The Department of Human Services works out the income-tested care fee based on an assessment of your financial situation. Please note that if you are a member of a couple, half of your combined income is considered in determining your income-tested care fee, regardless of which partner earns the income. The assessment does not include the value of your home or any other assets.


You can only be asked to pay an income-tested care fee if you have a yearly income above the following approximate thresholds:

  • individual person – $25,792.00
  • member of a couple but now separated due to illness (individual income) – $25,324.00
  • Member of a couple living together (combined income) – $40,050.40.

There are annual and lifetime caps that apply to the income-tested care fee. Once these caps are reached, you cannot be asked to pay any more income-tested care fees.


Exact thresholds can be found on the Department of Health website.


The Income Tested fee you pay (if any) is added to your current government subsidy amount and contributes to the funds you have in your package.


Care Management Fee

Each Government Approved Home Care Provider sets their own Care Management Fee. This fee is then charged to consumers. It is usually charged as a percentage and comes out of the pool of packaged funds allocated to each consumer depending on their package level.


This charge is to provide you with Care Management services. In the context of Home Care Packages, Care Management refers to the advisory and support services and should include the following:


Initial Assessment – To meet with you and discuss what the Approved Provider can offer you and assistance to apply for any supplementary funding you may be eligible for and assistance with referrals to the Aged Care Assessment Teams in the event that a consumer needs to move to a higher level package.


  • Explaining and signing the Home Care Agreement
  • The Development of an individualised Care Plan –
  • The booking and co-ordination of agreed services.
  • Mid year reviews
  • Annual reassessment of the care plan
  • Assist with referrals to Researching day activities/ respite / carer supports resource options
  • Facilitate with service providers, therapist, medical practitioners, and providers of equipment and plan modifications.
  • Booking of specialists e.g. Physiotherapy/ Occupational Therapy/ Podiatry
  • Research specialist client requirements

In light of the Consumer Directed Care principle, Better Living Homecare enables Home Care Package consumers or their family members if they choose to play an active role in the management of the package. There is a reduction in the Case Management fee if the consumer and their family would like to co-ordinate services themselves.


Administration Fee

Similar to the Case Management fee the Administration fee is set by the Approved Provider and is usually expressed as a percentage of the package of funds available to the consumer. Different Approved Providers charge differing amounts for Administration, so it is advisable to ask any prospective Approved Providers what they charge.


What does Administration Fee involve for Home Care Packages? The Home Care Package Administration Fee is a charge to administer each individual Home Care Package.


The fee charged usually covers the following activities-

  • Meet the Home Care standards,
  • Undertake Quality Agency reviews
  • Maintain ISO accreditation
  • Set up of approved providers
  • Audit of approved providers
  • Provide the necessary insurances like WorkCover, public liability and professional indemnity
  • Monitor and manage individual budgets
  • Arranging payment for services and equipment supplied
  • Reconciliation of Medicare subsidy payments
  • Preparation and review of activity statements
  • Monthly invoicing


In addition to above costs associated with Home Care Packages, you should also enquire about any other costs or ‘hidden charges’ that may be associated with different Approved Home Care Providers. For example: A set up cost at the start of the package or extra admin charges associated with service suppliers.  


All Approved Providers must advise the clients of the costs and manage funds in a transparent manner meeting quality and accountability requirements. If you, your carer, or anyone else is concerned about what you are paying for services, you should approach the organisation providing your services.


If your complaint is not resolved at this level, it can be escalated through the Aged Care Complaints Commissioner, or other appropriate body that handles complaints related to your services. Read more about how to make a complaint.




Better Living Home Care