Too wealthy for home care subsidies?
Did you think you would not qualify for the government subsidies on home care? Take another look – you might be surprised.
The cost of full-time private care provided in your own home may look daunting. But financial advice along with a government-subsidised home care package and support from friends and family might make home care achievable and affordable.
Each home care package comes with an assigned budget that you can choose how to spend on care services (after administration costs). Part of this budget is paid by the government and part is paid by the recipient.
But are you too wealthy to qualify for government subsidies?
Home care packages are income-tested. Any income-tested fee you are asked to pay reduces the government subsidy. There is no cut-off limit for eligibility for the government subsidies, instead, there is just an annual cap on the amount you might need to pay. This means no one is too wealthy to qualify for government subsidies, except possibly someone with a very high income who receives a Level 1 package.
The table below shows the minimum and maximum fees that you could be asked to pay for each package level as well as the government subsidy range (rounded to nearest dollar).
| Package level | Total annual budget | Care recipient pays: | Government pays: | ||
| Min | Max | Min | Max | ||
| Level 1 | $12,574 | $3,548 | $12,574 | Nil | $9,026 |
| Level 2 | $19,630 | $3,752 | $15,088 | $4,542 | $15,878 |
| Level 3 | $38,409 | $3,858 | $15,194 | $23,215 | $34,551 |
| Level 4 | $56,338 | $3,960 | $15,296 | $41,042 | $52,378 |
An income-tested fee is only payable if assessable income exceeds $28,101 per year for a single person, or $21,814 per year combined for a couple living together. Below this income level, only the basic fee is payable (which is the minimum amount in the table above). Some home care providers waive this fee, but if they do, it also reduces the package budget available for you to spend.
| Example 1: | Moira is a single homeowner with $1.2m in financial investments. She does not qualify for an age pension but has been approved for a Level 3 home care package. Moira will not pay an income-tested fee. She will only be asked to contribute $3,858 per year for her home care package and the government will pay the remaining $34,551. |
| Example 2: | Vinita and Rahul are married homeowners with $2m in financial investments. They do not qualify for an age pension, but Vinita has been approved for a Level 4 home care package. Vinita will not pay an income-tested fee. She will only be asked to contribute $3,960 per year for her home care package and the government will pay the remaining $52,378. |
Want to find out more? Want to see what support you might be eligible for? Reach out to the Direct Adviser team to discuss your situation.
IMPORTANT INFORMATION: This document has been prepared by Aged Care Steps Pty Limited, ABN 42 156 656 843 AFSL 486723, registered tax (financial) advisers (25581502) based on our understanding of the relevant legislation at the time of writing. While every care has been taken, Aged Care Steps Pty Limited makes no representations as to the accuracy or completeness of the contents. The information is of a general nature only and has been prepared without consideration of your individual objectives, financial situation or needs. Before making any decisions, you should consider the appropriateness for your personal investment objectives, financial situation or individual needs. We recommend you see a financial adviser, registered tax agent or legal adviser before making any decisions based on this information. Current at 1 September 2021.
