National Seniors Australia has welcomed the Federal Government announcement of the introduction of caps on home care administration costs and management fees from 1 January 2023.

Chief Executive, Professor John McCallum said, “Federal Government moves to reign in excessive charges is a first step to giving protection to older Australians as they wait for future reforms to set home care prices.”

“The Royal Commission into Aged Care Quality and Safety found action was required to address home care charges, because some providers were overcharging.

“High demand means there is no incentive to keep costs competitive. Some older Australians have been paying up to 50 per cent of their Home Care Package as administration and management fees. That’s not affordable or sustainable and is simply wrong.

“Under the changes that come into effect in January 2023, care management prices will be capped at 20% of the package level and package management prices will be capped at 15% of the package level.

“Excessive fees can restrict people’s access to services which can not only compromise their wellbeing and safety at home but also lead to premature entry into residential aged care.”

The caps set the maximum amount a provider can charge. They are not the target price for these services or an indicator of what is considered a ‘reasonable’ price. The government will consider the need for additional or lower caps as it monitors prices across the HCP sector in 2023.

The government is also clarifying that care management is a mandatory support service and that all prices must be reasonable.

In further changes, providers cannot charge for package management in a calendar month where no services (other than care management) are delivered – except for the first month of care, providers cannot charge separately for third party services, and they cannot charge exit fees.

Under changes to home care from 1 July 2024, the Federal Government will combine home care services into a new streamlined ‘Support at Home’ program. Under the proposed model, home care prices will be set by government.

“National Seniors Australia has been working with government to improve our aged care system and will continue to provide feedback throughout the reform process to ensure the new system benefits care recipients,” said Professor McCallum.