Improved Payment Arrangements for Home Care

The changes to how we pay home care subsidies to providers will occur in 2 phases. Instead of paying the full subsidy in advance each month, we will pay in arrears for services delivered. The new arrangements are in line with modern business practices and other Government-funded programs.

What will change?

The way the Australian Government pays Home Care Packages Program subsidies to providers will change.

Instead of paying the full subsidy in advance each month, we will pay in arrears for services delivered. The changes will happen in 2 phases.

Phase 1

In phase 1, we will pay home care subsidies in arrears each month.

We will continue to pay the full amount, regardless of the services provided in the past month. Providers will continue to hold unspent funds on behalf of their clients. There will be no change to how they manage unspent funds.

Phase 2

In phase 2, the payments will be for actual services provided. The Australian Government will hold any unspent funds. These funds will continue to be available to care recipients when needed.

The Government is considering the detail and timing of the changes under phase 2. We will provide more information as it becomes available.

Why are these changes important?

These changes align home care with other Government-funded programs like the National Disability Insurance Scheme (NDIS). They are also in line with modern business practices.

The Government announced home care payments reforms in the 2019-2020 Budget.

Why has the start date for phase 1 changed?

On 28 February 2020, the Government announced phase 1 (payment in arrears) would start on 1 June 2020.

On 27 March 2020, the Government announced the implementation of improvements to payment administration arrangements for home care packages would be placed on hold. This is due to the current situation with coronavirus (COVID-19) and the key role of the aged care sector to help combat this virus and support older Australians.

Consultations with the home care sector will help determine when implementation will recommence.

In the meantime, the current advance and claim payment cycle with Services Australia will continue.

How will it work?

When phase 1 starts, home care providers will have received their final advance payment in the previous month. Providers will instead receive full payment of the monthly subsidy after they lodge their monthly claim.

Providers will lodge their claim using the same process they do now and with the same information they provide now.

Who will benefit?

These changes will:

  • align home care with other Government programs such as the NDIS
  • introduce more modern business practices into the home care sector

An aim of these changes is to reduce the prudential risk in home care over time.

Who have we 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

The Government is considering the feedback and ACFA’s report in deciding the phase 2 implementation model and timeframe.

Will the changes affect care recipients?

The changes will not affect care recipients. You will continue to:

  • receive the same care and services from your provider, in line with your care plan
  • have the full Government subsidy available to you
  • be able to change service providers

How will the changes affect providers?

You will continue to:

Claiming payments

In phase 1, you will continue to claim through Services Australia. But the claim will be for the number of clients in care from the previous month. The usual compliance processes apply.

The Government is considering changes to claiming practices for phase 2.

Services Australia will change their payment system to enable the introduction of phase 1.

Using funding

You will continue to use funding to meet your clients’ care plan. Buying services and products will be the same. 

Transition support

ACFA consulted with providers to analyse how they may be affected financially by the changes to payment arrangements. We are looking into how we can help providers who may need support through these changes.

Business advisory services for aged care providers are available now to work with providers that are experiencing financial stress and are concerned about their viability.

Find out more

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.

homecarepolicy [at] health.gov.au

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Last updated: 
27 March 2020
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