Home Care Package fee scenarios for people entering care from 1 July 2014

A person's home care fees depend on their Home Care Package level, their income assessment and their negotiations with their provider. Find out how to calculate home care fees and how the income assessment works for people entering care from 1 July 2014.

How to use these scenarios

A person on a Home Care Package has a budget to pay for the services they need. This budget depends on the person’s package level, and includes:

  • contributions from the Australian Government (as subsidies and supplements) and
  • contributions from the care recipient (as home care fees they pay to their provider).

There are 3 types of fees a person may be asked to pay for home care:

  1. basic daily fee
  2. income tested care fee
  3. additional service fees.

Use the simplified scenarios below to help you understand how fees are calculated and how the income assessment works for people entering home care from 1 July 2014. The rates, thresholds and subsidies used in these scenarios were current on 20 September 2022.

Aged care rates, thresholds and subsidies do not remain constant: they change over time. These changes will affect a person’s home care fees. For a complete listing of the latest rates, refer to:

Read more about Fees for people entering Home Care Packages from 1 July 2014 and how they change over time.

Please note: These fee scenarios do not constitute financial advice. We encourage care recipients to seek independent financial advice to determine the best way to pay for their care.

Full pensioner – Susan

Susan, 78, has been approved for a level 3 Home Care Package. She lives on her own and is on the full age pension ($1026.50 per fortnight). Her annual income is $26,689.00.

Susan does not need to fill in an income assessment form: Services Australia already has enough information about her financial situation to complete her assessment.

As a full pensioner, she cannot be asked to pay an income tested care fee. Susan’s home care fees will consist only of the basic daily fee for a level 3 package: $11.40 per day.

The daily Government subsidy for a level 3 Home Care Package is $96.27.

Susan’s basic daily fee will be added to the Government contribution (subsidy plus any relevant primary supplements) to make up her total Home Care Package budget.

Under her current financial circumstances and using the rates current on 20 September 2022, Susan’s Home Care Package budget is made up of:

 Home Care Package budget

Daily amount

  • Government contribution
    = government subsidy
    = $96.27
  • Susan’s home care fees
    = basic daily fee
    = $11.40
  • Home Care Package budget
    = Government contribution + Susan’s home care fees
    = $107.67

Fortnightly amount

  • Government contribution
    = government subsidy
    = $1,347.78
  • Susan’s home care fees
    = basic daily fee
    = $159.60
  • Home Care Package budget
    = Government contribution + Susan’s home care fees
    = $1,507.38

After starting her Home Care Package, Susan finds she needs an additional service that is not covered by her level 3 package. She discusses her needs with her provider. She and her provider agree on a fee of $2 per day for the service she wants to add to her package. This fee will be added to Susan’s Home Care Package budget.

Home Care Package budget

Daily amount

  • Government contribution
    = government subsidy
    = $96.27
  • Susan’s home care fees
    = basic daily fee + additional service fee
    = $11.40 + $2.00
    = $13.40
  • Home Care Package
    = Government contribution + Susan’s home care fees
    $109.67

Fortnightly amount

  • Government contribution
    = government subsidy
    = $1,347.78
  • Susan’s home care fees
    = basic daily fee + additional service fee
    = $159.60 + $28.00
    = $187.60
  • Home Care Package budget
    = Government contribution + Susan’s home care fees
    = $1,535.38

Part-pensioner – Li Wei

Li Wei, 81, is a part-pensioner who lives with his daughter. He has been approved for a level 2 Home Care Package and is eligible for the dementia and cognition supplement (a primary supplement).

Li Wei and his daughter would like to find out what fees he will need to pay once his package starts. They call Services Australia on 1800 227 475 to request a fee advice letter. Services Australia already has Li Wei’s income information because he receives the age pension, so he won’t need to complete an income assessment form.

The daily Government subsidy for a level 2 Home Care Package is $44.24 and the dementia and cognition supplement is $5.09. The Australian Government will contribute these amounts less his income tested care fee towards Li Wei’s Home Care Package budget.

Li Wei’s basic daily fee of $11.09 is added to the Government contribution plus the income tested care fee to increase the total value of his package budget.

Li Wei’s total annual income, including his pension, is $38,500. This exceeds the income free area for a single person ($30,204.20), so he is eligible to pay an income tested care fee. His income is below the income threshold for a single person for the income test ($58,318.00), which means the first (rather than the second) income tested care fee cap applies for working out his income tested care fee.

Income tested care fee

Li Wei’s income tested care fee will be the lower of the following amounts:

  • the daily government subsidy plus the primary supplement for his package
    = $44.25 + $5.09
    = $49.33
  • 50 per cent of his income above the income free area
    = ($38,500 − $30,204.20) × 50% ÷ 364
    = $11.39
  • the first income tested care fee cap
    = $16.79

The lowest of these amounts is 50 per cent of his income above the income free area, $11.39.

Services Australia notifies Li Wei in a fee advice letter that, under his current financial circumstances, the maximum income tested care fee he can be charged is $11.39 per day. This is added to his basic daily fee to give his total daily home care fees.

Li Wei’s home care fees
= basic daily fee + income tested care fee
= $11.09 + $11.39
= $22.48

Under his current financial circumstances and using the rates current on 20 September 2022, Li Wei’s total Home Care Package budget is made up of:

Home Care Package budget

Daily amount

  • Government contribution
    = subsidy + supplement − income tested care fee
    = $44.24 + $5.09 − $11.39
    = $37.94
  • Li Wei’s home care fees
    = basic daily fee + income tested care fee
    = $11.09 + $11.39
    = $22.48
  • Home Care Package budget
    = Government contribution + Li Wei’s home care fees
    = $60.42

Fortnightly amount

  • Government contribution
    = subsidy + supplement − income tested care fee
    = $619.36 + $71.26 − $159.46
    = $531.16
  • Li Wei’s home care fees
    = basic daily fee + income tested care fee
    = $155.26 + $159.46
    = $314.72
  • Home Care Package budget
    = Government contribution + Li Wei’s home care fees
    = $845.88

Self-funded retiree – Maria

Maria and her partner, Tony, are self-funded retirees who live in a small town. Maria has approval for a level 4 Home Care Package. The Government will pay a daily subsidy of $145.94 for this package, and will also pay a viability supplement of $2.46 as Maria lives in a remote area.

Maria would like to know what home care fees she will be asked to pay when her package becomes available.

To find out what home care fees she is eligible to pay, Maria completes Services Australia's Aged Care Calculation of your cost of care form (SA486). She sends it to Services Australia to give them the information they need about her finances to work out her maximum income tested care fee.

Maria and Tony have a combined annual income of $120,000. As a member of a couple, half of this combined assessed income is taken to belong to Maria. This means that Maria’s total assessed income is $120,000 x 0.5 = $60,000. This is above the income free area for a couple living together ($23,413.00), which means Maria can be asked to pay an income tested care fee. Her income also exceeds the income threshold for a couple living together ($44,605.60), which means the second income tested care fee cap applies for working out her income tested care fee.

Income tested care fee

Maria’s income tested care fee will be the lower of:

  • the daily Government subsidy (plus any applicable primary supplements) for her package
    = $145.94
  • the first cap ($16.79) plus 50 per cent of her income above the income threshold
    = $16.79 + ($60,000 − $44,605.60) × 0.5 ÷ 364)
    = $16.79 + $21.14
    = $37.93
  • the second income tested care fee cap
    = $33.59

In this case, the lowest amount is the relevant (second) cap, $33.59.

Services Australia notifies Maria that the maximum income tested care fee she can be charged is $33.59 per day. This will be added to her basic daily fee of $11.71 per day to give her total daily home care fees:

Maria’s home care fees
= basic daily fee + income tested care fee
= $11.71 + $33.59
= $45.30

The viability supplement is an ‘other supplement’, not a primary supplement.

When Maria commences her Home Care Package, the Australian Government will pay the subsidy for a level 4 package less her income tested care fee, as well as paying the viability supplement. Her basic daily fee will be added to this amount to increase the value of her total package budget.

Under her current financial circumstances and using the rates current on 20 September 2022, Maria’s Home Care Package is made up of:

Home Care Package budget

Daily amount

  • Government contribution
    = government subsidy − income tested care fee + viability supplement
    = $145.94 − $33.59 + $2.46
    = $114.81
  • Maria’s home care fees
    = basic daily fee + income tested care fee
    = $11.71 + $33.59
    = $45.30
  • Home Care Package budget
    = Government contribution + Maria's home care fees
    = $160.11

Fortnightly amount

  • Government contribution
    = government subsidy − income tested care fee + viability supplement
    = $2,043.16 − $470.26 + $34.44
    = $1,607.34
  • Maria’s home care fees
    = basic daily fee + income tested care fee
    = $163.94 + $470.26
    = $634.20
  • Home Care Package budget
    = Government contribution + Maria’s home care fees
    = $2,241.54
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