Improved payment arrangements for home care

The changes for Phase 2 of the Improved Payment Arrangements (IPA) will start from 1 September 2021. The changes to how we pay home care subsidies and supplements to providers will occur in 2 phases.

The Australian Government (the Government) is changing the way Home Care Package Program providers are paid.

In Phase 1 (implemented on 1 February 2021), providers began receiving the full amount of funding in arrears each month, regardless of the services provided to the care recipient in the claim period.

In Phase 2 (from 1 September 2021), providers will receive funding based on the actual services delivered to care recipients in the previous month and Services Australia will create a home care account for each care recipient to collect and hold the Commonwealth portion of unspent funds until needed by the care recipient.

By the end of 2021, providers will need to report the Commonwealth portion of unspent funds for each care recipient to Services Australia.

This will align home care with other Government-funded programs like the National Disability Insurance Scheme, as well as modern business practices.

These changes will not affect care recipients' subsidy entitlements.

Why these changes are important

Home care providers are now liable for more than $1.5 billion of their care recipients’ Home Care Package funds. There is a need to reduce the amount of unspent funds held by providers as quickly as possible. This will ensure that care recipients’ package funds are always available to purchase the care and services needed.

These changes move the responsibility for holding the Commonwealth portion of unspent funds for care recipients from the provider to the Australian Government. This will reduce the prudential risk in home care over time and improve protections for care recipients’ home care funds as the program grows. These changes are also designed to reinforce the focus on delivering services to meet consumers needs and choices in the Home Care Packages Program.

The timing of changes and the phased approach balances the need to make these changes as soon as possible, while giving providers enough time to move to the new arrangements.

Who we have consulted

In October 2019, the Government asked the Aged Care Financing Authority (ACFA) to look at the potential financial impact of these changes on providers. We published ACFA’s report on 8 January 2020.

In November and December 2019, we held consultations with providers across Australia. This included providers delivering services in non-metro areas. We gathered feedback on:

  • potential non-financial impacts, including business administration
  • how to ensure the changes do not affect care recipients.

Find out more

For detailed information for care recipients, go to the updated IPA fact sheet for care recipients.

For detailed information for providers, go to the updated IPA fact sheet for providers.

For detailed information, go to the IPA fact sheet for Questions and Answers.

An updated PowerPoint slide deck from the Webinar on Improved Payment Arrangements – 7 May 2021 is also available. It reflects the new updated time frames and inclusions in the care recipient monthly statement.

Improved Payment Arrangements (IPA) for home care – Subsidy estimator and unspent funds examples

The Subsidy Estimator and Unspent Funds Examples are guidance materials for home care providers on how claims will work under IPA.

We will keep care recipients and providers informed of the changes through emails and our website. We will also update providers through the provider portal and aged care sector newsletters.

Contact

Improved Payment Arrangements for Home Care contact

Contact us if you have any questions about the improved payment arrangements.

IPA.enquiries [at] health.gov.au

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Last updated: 
20 September 2021
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