Expect to pay if you are going to stay at home

A record number of older Australians are receiving Government subsidised care in their own home. However a major shortage in the number of home care packages, together with growing care needs, means more people can expect to use their own assets to pay for the care they need if they want to stay put longer.

The latest Home Care Package Data shows the number of people waiting for their appropriate level of home care has increased by 3300 to more than 108,000 since last December.

The figures reflect a steady increase in people waiting since the first home care data report was released a year ago.

They also show that people are waiting 12 months or more for high level packages and three to nine months for a lower level package.

Almost 55,000 people are on lower-level interim packages while they wait for the care levels they need, but 33,000 people with high needs have not been assigned any care.

While there are plenty of people waiting, as at December, a record number of people or 77,918, were receiving government subsidised care, up 13.5 per cent from December 2016 and a five per cent increase from September 2017.

There are four levels of home care packages to help meet the different levels of care needs, which are determined by the outcome of an aged care assessment.

The annual amounts paid by the Government range from $8000 for a level one package to $49,500 for a level four package, with the amount varying depending on whether a person is asked to make a contribution through an income tested fee. It roughly equates to between two to 14 hours of support a week.

Generally, a case manager is assigned by a provider to help with the co-ordination of services including cleaning, showering, meal preparation and respite as well as the purchase of equipment such as walkers.

For many people the 12 month wait for a package, which may not even come close to providing the care they actually need even if they got one, is not an option if they are determined to avoid residential care.

They either have to look to their income and assets to pay privately for the care they need and either top up any government services they are getting, or avoid the Government system altogether.

Figures produced for Third Age Matters by a Canberra based nursing agency estimated that someone needing full time care at home could expect to pay about $250,000 a year to cover the cost of three full time staff during the week and additional help on weekends.

Additional costs could be incurred through paying their superannuation, leave entitlements and insurance provisions.

The overall figure could also vary depending on whether the care workers were enrolled nurses or care support.

Director of home care solutions company DRC Consulting, Danielle Robertson, says rates for private care through a reputable provider vary from between $50 – $80 per hour for care, with registered nurse rates even higher.

Robertson says some people prefer to recruit their own carers and can then negotiate the rate of pay (based on the award) but also need to employ the carer, cover them for all their insurances and superannuation.

They would need to manage the rosters and replacement carers, she says.

While it may work out cheaper than going to a provider, it can also be more work for the family, says Robertson.

On-line platforms offer an alternative way of employing support directly. Those needing care can choose and self-schedule workers based on their needs and preferences.

The co-founder of Better Caring Peter Scutt says choosing and scheduling a team of independent support workers, therapists and nurses directly via the Better Caring platform would cut costs by about 20-30 per cent.

The platform removes the administration burden of finding and managing a team of support, he says. It also covers workers insurance.

Aged Care Finance solutions specialist Paul Dwyer says if the assets or income aren’t readily available to pay for support privately there may be the capacity to borrow.

Anyone aged 80-90 can rule out getting a home loan and probably a personal loan, however tapping into the equity of a home through a reverse mortgage may be an option, he says.

With a reverse mortgage the loan – which can be taken as a regular income stream or lump sum – is typically repaid when the borrower has vacated the property or passed away.

Dwyer says someone needing $60,000 over ten years could draw down $500 a month in a reverse mortgage and expect to repay $98,000 (based on an interest rate of 8.5 per cent) when the time comes.

Homesafe provides a debt-free alternative via a home equity release solution where the homeowner agrees with Bendigo Bank owned Homesafe to sell a share of the future sale proceeds of their home in return for a lump sum payment today – the home is only sold when the homeowner chooses, or after the death of the surviving homeowner, with the unsold share of the sale proceeds returned to their estate.

Dwyer says using the same $60,000 example as above, the equivalent amount that would be repaid to Homesafe is about $155,000.

In a review of reverse mortgages released this week by ASIC, the consumer watchdog raised the concern that while accessing equity in the home can help people achieve a better quality of life, more consideration was needed as to how a loan could impact someone’s ability to afford their possible future needs – such as moving into residential aged care.

If the goal is to age gracefully in your own home, with support and with or without government assistance, there are options available.


Bina Brown is a director of aged care solutions company Third Age Matters