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on Wednesday, February 12, 2025
Have you recently been approved for a home care package and been asked to complete an Income Assessment Test? If you’re unsure what it entails or whether you need to pay an Income Tested Fee (ITF) for your Home Care, keep reading—we’ll break it down in simple terms!
Income-tested care fees (ITFs) are a critical component of the costs associated with home care packages in Australia. These fees are designed to ensure a sustainable and equitable aged care system by requiring contributions from those who can afford to pay.
This guide will break down the concept of ITFs, their purpose, and how they are calculated, providing a comprehensive understanding of their role within the home care framework.
Income-tested care fees are means-based contributions that some home care package recipients are required to pay. Here are the key points to understand about ITFs:
1. Not Everyone Pays ITFs: An income assessment determines whether a person needs to pay an ITF and how much their contribution should be.
2. ITFs Are Directed Toward Care: Contributions are added to the Home Care Package budget and are used exclusively for the recipient’s agreed-upon care and services.
The government uses ITFs to ensure fairness and sustainability, asking those with higher incomes to contribute more. These fees are capped annually and over a recipient’s lifetime to ensure affordability
Home care packages are coordinated care plans that provide support to Australians who wish to live independently in their homes. These packages allow individuals to choose the services and providers that best meet their specific care needs. Each package is government-subsidised to a specific degree, with additional contributions coming from recipients themselves.
Home care packages are coordinated care plans that provide support to Australians who wish to live independently in their homes. These packages allow individuals to choose the services and providers that best meet their specific care needs. Each package is government-subsidised to a specific degree, with additional contributions coming from recipients themselves.
A home care package budget consists of:
These combined funds determine the total budget available to cover the services outlined in the care plan. As a consumer-directed marketplace, individuals can compare costs across providers using tools such as the My Aged Care website’s “Find a Provider” tool.
Income-tested fees are calculated based on a person’s income, including their pension. However, certain allowances and supplements—such as the pension supplement, Clean Energy Supplement, and rent assistance—are excluded from this calculation. Full pensioners and individuals with limited incomes may not be required to pay an ITF at all.
The government has established three income brackets to determine ITF obligations:
1. Low-Income Brackets:
2. Middle-Income Bracket:
3. Higher-Income Bracket:
Thes brackets and amounts are reviewed and adjusted every March and September to account for indexation.
ITFs are assessed by Services Australia, Centrelink, or the Department of Veterans Affairs (DVA). When an income test form (SA456) is submitted, assessors:
1. Review financial details to determine applicable fees.
2. Notify both the recipient and their provider of the fee amount.
3. Deduct the assessed fee from the government’s contribution to the Home Care Package.
Recipients’ income is reviewed biannually in line with indexation, but individuals can request an earlier reassessment if their financial situation changes significantly.
To maintain affordability, ITFs are subject to annual and lifetime caps:
1. Annual Caps:
2. Lifetime Cap:
Once a recipient reaches these caps, they cannot be asked to pay additional ITFs. Caps are indexed in March and September, and the applicable cap is determined by the rates in effect when the cap is reached.
If a recipient’s financial situation changes, they can request a reassessment of their ITF. This ensures that contributions remain fair and aligned with their current income. Visit the “Changes to Aged Care Fees” section on My Aged Care for more details.
Income-tested care fees are a vital aspect of Australia’s Home Care Package system, ensuring resources are distributed equitably while keeping care affordable for those in need. By understanding ITFs, recipients can better plan their finances and choose the right provider to meet their care requirements. For personalised assistance, consider reaching out to approved providers like The CareSide, who can help navigate the complexities of ITFs and other home care fees.
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