Guide to Aged Care Law

Contributions in home or community settings

Older people receiving care in home or community settings may need to make contributions towards the cost of their care. This takes into account how much they can afford to pay, based on their means test.

The older person’s contribution amount – how much they have to pay – is generally worked out in a similar way for each of the service groups in a home or community setting. 

[Chapter 4 – Part 3 – Division 1]

Calculating contributions – home or community settings

The general method to work out the contribution amount is:

  • Find the individual contribution rate for the day.
  • Work out the service price.
  • Multiply the individual contribution rate by the price.
  • Subtract the fee reduction supplement (if this applies).
  • Calculate the final contribution amount.

Find the individual contribution rate

The individual contribution rate is the starting point for working out the amount an older person has to pay. This is a percentage amount that’s worked out through means testing. 

Work out the service price 

The service price depends on the type of service and how it’s delivered. The service price is based on the price used to work out the subsidy. For example, if the subsidy is based on efficient price, the contribution amount is also based on the efficient price.

Actual cost

If the subsidy is based on an actual cost, then the service price will either be:

  • the actual cost
  • a percentage of the actual cost, depending on certain circumstances explained in the Rules. 

Efficient or unit price

If the subsidy is based on an efficient price or unit price, the service price is the number of units or hours delivered to the older person, multiplied by the lesser of either the:

  • base efficient price or base unit price for the service, or
  • price charged by the provider for one hour or one unit of the service.

Multiply the individual contribution rate by the service price

The percentage of the individual contribution rate is multiplied by the service price.

Subtract the fee reduction supplement

Subtract the fee reduction supplement from the calculated amount (but not below zero). The fee reduction supplement is a secondary person-centred supplement that reduces the amount that someone needs to pay. This applies to people who meet certain conditions, such as financial hardship.

Final contribution amount

The result is the individual’s contribution amount for the service.

Other charges

Providers can charge a compensation payment fee to older people who are receiving a compensation payment that has reduced the provider-based subsidy. 

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