Q. Mum is 86, a widow and lives at home. I am concerned about her welfare but she refuses to consider moving to a Nursing Home. I respect her wishes to stay at home but she does need some assistance. She receives $780 a fortnight part Age Pension and has a $200,000 Term deposit with the Bank. What form of assistance is she entitled to and who should we contact for help?

A. Not unsurprisingly living in your family home as long as possible is a key priority for most elderly people.  Whilst there is a general recognition that they may need assistance in some aspects of daily living, they fiercely value their independent living.

Access to Home Care Packages (HCP) is initiated via “my aged care” and the Department of Human Services.  The program provides services to assist individuals to remain at home for as long as possible by providing choice and flexibility in the way support and care services are provided.

To be eligible for a HCP your mum must be assessed by the Aged Care Assessments Team (ACAT).  The ACAT will then prepare a letter confirming eligibility for a HCP and detail the level of care your mum is approved for.

The level of Government subsidy available depends upon what level of support your mum is deemed to require.  There are four levels of HCP available; level 1 for basic needs, $22.35 Government subsidy per day, level 2 for low level care needs, $40.65 Government subsidy per day, level 3 for intermediate care needs, $89.37 Government subsidy per day and level 4 for High level care needs, $135.87 Government subsidy per day.

Your mum will then be placed in the national priority queue for HCP and will be contacted when a package becomes available.  Once offered, your mum will have up to 56 days to accept the package and choose a provider.

You should meet with providers in your area to discuss Services available. These may include, transport for shopping and appointments, social support by way of companionship, domestic assistance for household tasks such as cleaning and lawn mowing, personal care assistance for bathing or dressing, food services such as assistance with preparation or delivery of meals, home modifications for example installing medical alert alarms, ramps and rails. Services can be tailored to your mum based on her personal needs and the funding available.

HCP cannot be used as a general source of income for day to day living expenses rather, they are a subsidy paid to HCP providers.  HCP providers can charge administration and management fees in addition to the provision of the service.  From 27 February 2017, several changes were made to increase the choice for consumers.  Consumers now can choose which provider they choose to work with.  Consumers can transfer any unspent amounts from one provider to another.

When accepting an HCP, the recipient may be asked to pay a range of fees towards the cost of their care depending on their circumstances. A Basic Daily Care fee is negotiated between the recipient and the provider.  The maximum daily care fee is capped at 17.5% of the maximum single Age Pension rate.  Currently, the cap rate is $10.17 per day.

Depending on your mum’s income, an income-tested fee may apply.  This income tested fee reduces the Government subsidy paid to the HCP provider.  The provider will charge the same cost for the approved level of support, however, your mum will pay a greater portion of the cost.  An income tested fee is not payable if your mum’s income is less than $26,327. If your mum’s income exceeded this threshold but was less than $50,876, then the fee applicable would be 50% of the income in excess of $26,237 capped at a daily rate of $14.59 per day.  If your mum’s income was greater than $50,876, then the fee would be 50% of the income in excess of $50,876 capped at a daily rate of $29.19 per day.  A lifetime cap applies to income tested fees which is indexed and is currently $63,759.

Your mum will be required to submit an Aged Care Fees Income Assessment form (SA456) to the Department of Human Services to determine her applicable fees. An HCP fee estimator and further information can be found on HCP can be found at www.myagedcare.gov.au

Whilst the basic daily care fee is not means tested, there are a range of Financial Planning strategies that can be adopted to reduce the impact of the income tested fees.