Improved Payment Arrangements budget measure – bill 2 introduced

Bill 2 of the Aged Care Legislation Amendment has been introduced to support the implementation of the Improved Payment Arrangements measure announced in the 20–21 Budget.

Date published:
Subscriber announcement
Health sector

On 21 October 2020 the Government introduced Bill 2, Aged Care Legislation Amendment (Improved Home Care Payment Administration No. 2) Bill 2020. Debate is scheduled to resume soon on Bill 1 introduced on 27 March 2020, but delayed due to the COVID-19 pandemic.

Together these bills will support the implementation of the Improved Payment Arrangements measure announced by the Government in the 20-21 Budget. Pending legislation passing, this measure will reduce the prudential risk in home care over time and improve protections for consumers’ home care package funds. Further information about the Improved Payment Arrangements changes is below:

Phase 1 (Bill 1)

  • Providers will receive their January 2021 advance in December 2020 as per normal. There will be no February advance.
  • From 1 February 2021, providers will be funded in arrears rather than in advance, based on the number of care recipients in care.
  • Payments for February 2021 will be made in March 2021, for the full subsidy, based on actual number of care recipients in the service during February 2021.

Phase 2 (Bill 2)

  • From 1 September 2021, payments will continue to be paid in arrears, but will based on actual care and services delivered in the previous month.
  • In their September 2021 claim (lodged in October 2021) providers will need to submit a total dollar amount per care recipient to Services Australia. A detailed invoice by service type is not required.
  • Providers must continue to provide detailed monthly statements to their care recipients.
  • Services Australia will create a home care account for each care recipient. Any unspent Government subsidy accrued from 1 September 2021 onward will be held in this account, until the care recipient needs it.
  • Providers can voluntarily opt-in during a six month window (1 September 2021 – 28 February 2022) to draw down the unspent funds they hold for a care recipient before receiving payment from Services Australia. Providers do not need to opt-in for all their care recipients. Services Australia will accrue the home care package subsidy for these care recipients in their home care account until the unspent funds held by the provider are used up for those care recipients.
  • Those providers that do not opt-in will continue to hold their care recipients’ home care subsidy funds. These funds do not need to be reported to Services Australia. Providers will use these funds for the care and services of their care recipients.
  • When a care recipient leaves the provider’s service (either transfers to a new service or exits home care) the Commonwealth portion of unspent funds will be returned to the Government.
  • From 1 September 2021 providers will continue to hold each care recipient’s portion of unspent funds and be accountable for these to their care recipients. Such funds must be returned to the care recipient directly when they leave home care. When a care recipient changes service provider these funds must go with them.

Providers and care recipients will continue to be informed about the details on the Improved Payment Arrangement changes as implementation progresses.