When we apply reductions
A subsidy reduction is an amount that we deduct from the combined total of a care recipient’s basic subsidy and primary supplements.
The 2 types of reductions are:
Care subsidy reduction
The care subsidy reduction is the amount that we deduct when a care recipient contributes to their care costs through the income tested care fee.
The care subsidy reduction does not apply to care recipients who entered the Home Care Packages Program before 1 July 2014.
What providers need to do
For a new care recipient, you need to ensure they have had an income assessment through Services Australia.
After you submit an Aged Care Entry Record Form through the Aged Care Provider Portal, Services Australia will send a fee advice letter to you and the care recipient.
Please remind them to complete the income assessment form if they do not already have a current income assessment.
You must support the care recipient to understand fees and their income assessment.
You are responsible for regularly collecting the income tested care fee at an interval that suits your business. You cannot waive or reduce the income tested care fee.
Find more information about the income tested care fee.
Applying the care subsidy reduction
Services Australia will automatically deduct the income tested care fee from the combined total of a care recipient’s basic subsidy and primary supplements. It does not affect the hardship supplement or viability supplement.
For examples of how the income tested care fee affects the Home Care Package subsidy, see fee scenarios.
When care subsidy reduction is set to zero
Where Services Australia assesses a care recipient as not needing to pay the income tested care fee, we set the care subsidy reduction to zero. This means you cannot collect the income tested care fee from that care recipient.
We will let you and the care recipient know if this applies.
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Residential aged care fees contact
Compensation payment reduction
A care recipient can be entitled to compensation payment(s) through a:
- settlement
- judgement
- reimbursement arrangement.
This may be for things like an injury in the workplace or from a car accident.
If the compensation payment covers some or all of the cost of their home care, a reduction applies.
We will deduct the compensation amount from the combined total of their basic subsidy and primary supplements entitlements.
What you need to do
You must notify Services Australia if your care recipient has a compensation entitlement:
- If a care recipient is entering your services and is entitled to compensation payments, provide the details at question 12 of the Aged Care Entry Record Form.
- If a care recipient is already in your care and becomes entitled to compensation payments, contact Services Australia.
We (or Services Australia) will tell you and the compensation payer the amount of the reduction.
You can invoice the care recipient for the reduction amount to pass on to their compensation payer.
Find more information about how compensation entitlements impact a care recipient’s subsidy in Appendix D of the Home Care Packages Operational Manual.
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