The Federal Government is the primary funder of aged and disability care in Australia. State Governments are often contracted by the Federal Government to deliver services. In the case of disability care, the lion share of funding comes from State Governments, but soon to change to the National Disability Insurance Scheme. There is a process of application and assessment of care needs. The assessment is performed by an Aged Care Assessment Team (ACAT), who decide what level of services are required (what the government is prepared to pay for). There are 4 levels of funding depending on need. Once an ACAT assessment has been completed under the CDC system the client will need to complete an income assessment via Centrelink to determine eligibility. Only persons on the aged pension or with annual income levels below a fixed amount are eligible for government funded home care packages. Nobody will be denied services because they can’t afford it.
If a person has independent means then the government will ask the person to make a contribution towards their care. This is assessed through a means testing process managed by Centrelink. New Income Testing rules apply to people who started receiving CDC home care after 1 July 2014 (after 1 July 2015 all care packages are CDC). These new rules are about ensuring that people who have the capacity contribute towards their care. These fees are summarised as follows:
All individuals are required to pay a basic fee regardless of their circumstances. This is set at 17.5% of the single aged pension, currently $133.98 per fortnight.
Persons on a full aged pension do not pay income-tested fees but they do pay the basic care fee.
All income-tested fees apply if the following income thresholds are exceeded.
Part pentioners and self-funded individuals with income less than the upper limit of the income test will have income tested fees capped at a maximum of $5,000 per annum. Self-funded individuals who have income above the upper income test threshold have income tested fees capped at a maximum of $10,000 per annum ($60,000 in a lifetime). If no financial information is provided to Centrelink then the full fee of $10,000 is charged.
To establish your income tested fee use the calculator on the Government My Aged Care website. www.myagedcare.gov.au
Once a person has been deemed eligible for a government package, they will be referred to a government-funded provider, that has funding available for your needs. There may be a waiting list for your type of care needs, as a limited number of packages are made available in each area. A private pay provider can provide care while you wait for a package to become available.
A person or their family can fund their care needs out of their own resources. This could be via retirement or superannuation savings, income earning assets, dividends and the like. Where a service is funded privately there is no waiting list, no restriction on the services provided and no restriction on the extent of those services. The Federal Government have a stated policy of increasing contributions to care by people who have the means to afford it. They call this the ‘user pays’ model.