As we age, many of us prefer to stay in the comfort of our own homes while receiving the care we need. That’s where Home Care Packages (HCPs) come in offering support to older Australians who want to remain independent. But understanding the costs associated with HCPs can feel overwhelming. Whether you're an older person, a carer, or a family member exploring options, this guide breaks it down simply, so you know what to expect and how to make the most of your package.
1. What Is a Home Care Package?
A Home Care Package is a government subsidised program that helps older Australians get support services in their own homes. HCPs provide coordinated and flexible services for older people with more complex or ongoing care needs.
1.1 Who is Eligible?
You may be eligible for HCP if:
- You are 65+, or
- 50–64 and Aboriginal or Torres Strait Islander, or homeless/at risk of homelessness.
- You have complex care needs not met by CHSP.
1.2 Levels of Home Care Package
There are four levels of Home Care Packages based on the level of care needed:
- Level 1 – Basic care needs
- Level 2 – Low care needs
- Level 3 – Intermediate care needs
- Level 4 – High care needs
2. What Makes Up My Home Care Package Budget?
Your Home Care Package budget is made up of two key components:
2.1 Government Subsidy
Paid directly to your approved provider by the government.
2.2 Your Contribution
You may be asked to contribute depending on your income. You will probably be contributing in the form of a basic daily fee, income-tested care fee, or extra service fee.
All the funds are pooled together into a single budget and used to deliver the services you need. Any unspent funds stay in your account and can be used later or moved with you if you change providers.
3. How Does a Home Care Package Budget Work?
Your provider will create a budget and care plan based on your individual needs. Each month, you'll receive a monthly statement showing how funds have been spent.
Your Home Care Package budget is used to pay for services that help you remain independent and safe at home. The funds can be spent on:
- Direct care services (e.g., personal care, nursing, cleaning)
- Care coordination (planning and reviewing your care needs)
- Equipment and home modifications (like shower chairs, handrails)
- Transportation or social outings
- Health-related services (e.g., physiotherapy)
However, not all of your budget goes toward direct services. A portion will be used for:
- Care Management Fees – For planning, organising, and monitoring your care
- Package Management Fees – For handling financial reporting, compliance, and admin
These management fees vary by provider and can have a significant impact on how much is left over for actual services, so comparing providers is essential.
3.1 How Do I Know if I Need to Pay an Income-Tested Care Fee?
The income-tested care fee is determined by Services Australia through a formal means assessment. If you're a full pensioner, you likely won’t need to pay this fee. However, part-pensioners and self-funded retirees may be required to contribute based on their income.
You can complete an income assessment via Services Australia to find out what applies to you.
3.2 Annual and Lifetime Caps
When you receive a Home Care Package, you may be asked to pay an income-tested care fee, a contribution toward your care based on your assessed income. However, to make sure these fees remain affordable and fair over time, the Australian Government has put limits in place:
Annual Cap:
This is the most you’ll pay in income-tested care fees in one financial year, regardless of your income.
- Part-pensioners: Maximum of $6,543.66 per year
- Self-funded retirees: Maximum of $13,087.39 per year
Once you hit this annual cap, you won’t be charged any more income-tested care fees for the rest of that year. Your Home Care Package continues as normal.
Lifetime Cap:
This is the most you’ll pay in income-tested care fees over your lifetime. Once you've paid up to this amount, you’ll never have to pay the income-tested care fee again, no matter how long you stay in the program or how many services you receive.
- Lifetime Cap (2024–25): $78,524.69
4. What Costs Are Involved in a Home Care Package?
If you're eligible for a Home Care Package, it's essential to understand the cost of Home Care Package, including your contributions and the government's funding. Knowing how your budget is structured helps you choose a provider that meets both your care needs and financial situation.
4.1 Government Subsidy
The Australian Government provides a different level of funding for each Home Care Package, depending on the level of care required. As of 1 March 2025, the daily and fortnightly subsidy amounts are:
These amounts are reviewed and adjusted each year on 1 July.
If you are required to pay an income-tested care fee, the government reduces your subsidy by the same amount.
The subsidy is paid directly to your chosen home care provider. You’ll work together with the provider to plan the services and support you need, staying within the budget provided.
4.2 Your Contribution
When you receive a Home Care Package, there are different types of fees you might have to pay, depending on your financial situation and which provider you choose. Here's a simple rundown:
1. Basic Daily Fee:
This is a standard fee set by the government that most people in a Home Care Package are asked to pay. It’s calculated as a percentage of the single age pension (between about 15.7% and 17.5%). The fee gets reviewed twice a year, in March and September, to stay in line with pension changes.
As of March 20, 2025, the daily fees are:
Not every provider will ask you to pay this fee. If they do, it’s added to your budget and means more services can be covered. If they don’t charge it, your budget will be smaller, which might limit the services available.
2. Income-Tested Care Fee:
This is an extra fee based on your income, assessed by Services Australia.
- If you’re a full pensioner or your income is below about $33,849.40, you won’t pay this fee.
- If your income is above certain thresholds, you could pay up to $18.85 per day. For example:
- Single person earning over $33,849.40
- Couple living together earning over $26,197.60
- Couple living apart for health reasons earning over $33,173.40
- For even higher incomes, the fee could be between $18.85 and $37.70 per day.
These income limits and the maximum fees are reviewed twice a year, in March and September.
3. Extra Service Fees:
Any additional costs for services that aren’t included in your regular care plan are paid directly to your care provider. These are optional and only apply if you agree to extra services beyond what’s covered by your package.
Example: If Victoria has a Level 3 package that covers personal care, cleaning, and nursing, but wants weekly hairdressing and monthly foot care, she can arrange for those as extra services. She would then pay an additional fee for each of those services.
4. Provider Fees (Care & Package Management):
Your Home Care Package funds also cover the administration and care management by your chosen provider.
These may include:
- Care Management Fee: For planning and coordinating your services
- Package Management Fee: For handling the budget, reporting, and compliance
Providers charge different rates for these services, so it’s important to shop around and compare.
5. What Services Are Covered by a Home Care Package?
Services included in a Home Care Package can be tailored to your individual needs. Here are some examples:
- Personal care (showering, dressing)
- Domestic Cleaning (cleaning, laundry, organizing)
- Companion Care (conversation, medication reminder, meal preparation)
- Overnight Care (supervision, assistance, monitoring)
- Nursing Care (medication, wound care)
- Gardening (lawn, seasonal clean-ups)
- Transportation (appointment, shopping)
- Home Modification (lighting and switch adjustment, bathroom modification)
- Physiotherapy (exercise, stretching)
The level of your package will determine how many and what types of services you can receive.
6. How Are Costs Managed?
Once your Home Care Package is assigned, you'll need to choose an approved provider to manage it.
There are two main approaches:
- Provider-managed – The provider handles all budgeting and service coordination.
- Self-managed (or partially managed) – You have more control and may save on management fees.
7. Tips for Reducing Out-of-Pocket Costs
Here’s how to make your Home Care Package go further:
- Check if you’re a full pensioner: You may not need to pay any income-tested fees.
- Use the fee estimator on the My Aged Care website to get an idea of your costs.
- Use comparison tools: Find better value for management fees and service rates.
- Switch providers if needed: Unspent funds move with you, and you can change without penalty.
8. Conclusion
Understanding the costs of a Home Care Package doesn't have to be overwhelming. With the right information, you can make informed decisions that ensure you or your loved one gets the care needed without financial stress.
Remember:
- Fees vary, but many are based on your income.
- Comparing providers can save you money and give you more control.
- Help is available through My Aged Care and care advisors.
At ACC, we help you navigate the complexities of Home Care Packages, explain your fee obligations, and even assist in negotiating lower provider charges. Our expertise can make a real difference in choosing a provider that fits both your care needs and your budget—ultimately helping you reduce out-of-pocket costs and make the most of your package funding.
9. Frequently Asked Questions
Is a Home Care Package free?
No, while the government provides most of the funding, you may be required to contribute depending on your financial situation.
Why do providers charge different fees?
Because Home Care Package providers are allowed to set their own fees for care and package management. That’s why comparing providers is so important.
What happens if my needs change?
If your care needs increase, you can request a reassessment and may be moved to a higher-level package.
