Your Complete Guide: Understanding how does aged care funding work in Australia
We know that understanding the aged care funding process and aged care costs can be confusing, time-consuming and, well, a little overwhelming.
To make the journey easier, we’re here to explain the role of government funding, as well as the fees you may need to contribute.
The Australian Government plays a vital role as the primary funder and regulator of the aged care system to ensure that every older Australian receives the support they need.
The funding system is carefully designed to accommodate various levels of care, whether it’s enabling individuals to continue living independently in their own homes or providing the necessary support when residential aged care becomes the best option to optimise safety and wellbeing.
With these government subsidies and regulations, the goal is to make high-quality, personalised care accessible and manageable, so you can focus on what truly matters – enjoying your life.
Types of aged care services
The Australian Government provides funding for a variety of aged care services, including in-home support, such as the Commonwealth Home Support Programme (CHSP), and Home Care Packages (HCP).
It also provides a subsidy for those requiring residential care.
The Commonwealth Home Support Program (CHSP)
The Commonwealth Home Support Programme (CHSP) provides subsidised entry-level support to assist older people (aged 65 and over).
It’s designed for those who just need a little bit of help to remain living independently, offering in-home and community care services.
The program is subsidised by the Australian government and delivered by aged care CHSP service providers like Feros Care
Home Care Package (HCP)
A Home Care Package (HCP) provides support for people aged 65 and over with higher-level needs.
In Australia, Home Care Packages are available at four levels, designed to match the varying needs of seniors who want to remain living at home.
These are delivered by an approved home care provider like Feros Care.
Residential aged care
Residential aged care is provided in aged care homes on a permanent or respite basis, for those who can no longer manage at home on their own.
You can read about Feros Care’s vibrant residential villages here.
Who pays for what – Home Care Packages
The Australian Government’s contribution
The government pays a Home Care Package subsidy on behalf of each eligible senior to cover most of the cost of Home Care Packages.
Income tested care fee
The income tested care fee is an additional fee that some people may pay if their income is over the maximum income for a full pensioner.
This contribution is determined by Services Australia based on your income, so you only pay what’s appropriate for your financial situation. There are annual and lifetime caps on the income tested care fee.
Basic daily fee
At Feros Care, the basic daily fee is not mandatory. It will only be suggested if you need more care than what is available to you via the Australian Government subsidy.
The Australian Government sets this optional basic daily fee at up to 17.5% of the basic age pension, depending on the Home Care Package level approved.
Other fees:
- Care management fee – Covers ongoing administrative and organisational costs including staff training, insurances, and rostering to name a few.
- Package management fee – Covers costs associated with things like making calls on your behalf (e.g. liaising with My Aged Care), processing invoices, sending emails relating to your care etc.
As we have a provider-managed model at Feros Care, you are assigned a Wellbeing Manager to coordinate all of these tedious and time-consuming tasks. The costs are all wrapped up into the care management fee.
Self-managed packages, however, incur additional costs for these tasks (called ‘charge for service’ fees), as they are not included in your package.
Who pays for what – Commonwealth Home Support Programme (CHSP)
The Australian Government covers most of the funding for the Commonwealth Home Support Programme (CHSP) but encourage people to contribute financially to help keep the program financially sustainable.
For accurate and up-to-date details on both Home Care Package and Commonwealth Home Support Programme fees and caps, it’s always a good idea to check the Australian Government website, or relevant aged care providers like Feros Care.
Who pays for what – Residential aged care
The Australian Government pays subsidies and supplements to approved providers (like Feros Care) for each resident receiving care under the Aged Care Act (1997).
Accommodation costs, such as the refundable accommodation deposit (RAD), are paid by residents to aged care providers. But remember, ‘refundable’ is the key word here as it’s paid back when you leave the facility.
Residents pay the basic daily fee for the services they receive at the aged care facility. There is also a means tested care fee and accommodation costs, both of which are dependent on your means assessment.
Accessing aged care funding
My Aged Care is the primary contact point for people seeking aged care services subsidised by the Australian Government.
Aged care providers, like Feros Care, must meet Aged Care Quality Standards to ensure quality care and services are provided.
Final thoughts
Aged care funding is designed to support older people with varying levels of care needs.
The Australian Government provides funding for a wide range of aged care services, including home support, home care, and residential care. If you can’t afford your aged care home costs for reasons beyond your control, you can ask to be considered for financial hardship assistance.
Aged care providers, such as Feros Care, offer support and guidance to help older Australians and their loved ones navigate the aged care system with ease and confidence.
To learn more about how we can support you, phone us on 1300 090 256 or visit our home care packages page.
