Improved Payment Arrangements (IPA) for Home Care Package clients

Background Information

From 1 January 2021, the Australian Government made changes to the way Home Care Package funding is managed and communicated by Home Care Providers.

In Phase 1 (implemented on 1 February 2021), Home Care Providers began receiving the full amount of funding, paid in arrears each month. Previously, it was paid in advance.

In Phase 2 (from 1 September 2021), funding to Home Care Providers was based on the actual services delivered to clients in the previous month. Previously, funding was provided in full, regardless of services. These changes are commonly called ‘Improved Payment Arrangements’ (IPA).

What are the main changes under Phase 2?

1. Funding to Home Care Providers will be based on actual services delivered in the past month

HammondCare will now need to submit an invoice to Services Australia for goods and services delivered to you in the past month. For example: Home Care goods and services delivered in September will be invoiced to Services Australia in October.

2. Establishing a Home Care Account for each Home Care Package client

  • A Home Care Account will be created and maintained for you by Services Australia. NOTE: This is being directly arranged by Services Australia, not by HammondCare.
  • Any unspent funds from 1 September 2021 onwards will be held in this account. These funds will continue to be available to you when needed.
  • Any unspent funds held as at 31 August will continue to be held by HammondCare.
  • You will not be able to directly view your Home Care Account. However, your monthly statements provided by HammondCare will detail the account balance each month – along with any other information regarding your individual Home Care Package funding balance.
  • The Finance team is on-hand to assist with any enquiries you may have about this.

3. Reporting of Unspent Funds

  • HammondCare will need to report any Commonwealth unspent funds you currently hold on behalf of Home Care Package clients before 31 December 2021. This must be an itemised report on the Commonwealth portion of unspent client funds.
  • HammondCare is required to provide a monthly report to Services Australia, so they have oversight of the funds we are holding. However, nothing will happen to the funds stated. NOTE: HammondCare encourages you to use any spare funds to improve the Home Care services provided to you. This can be coordinated through your local Care Manager.

How will these changes affect me?

On 1 September 2021, Services Australia will create a Home Care Account for you with a balance of $0. The Home Care Account cannot go into deficit.

From 1 September 2021, when Home Care Providers lodge their monthly claims the Government subsidy will be used to cover the price of the services received in the past month. If the Government subsidy is:

  • More than the price, the difference (the underspend) will build-up in the Home Care Account for future use
  • Less than the price, Services Australia will use any excess funds in the Home Care Account to cover the difference
  • If the price is more than the available Home Care Account balance, the remaining balance will be covered by any unspent funds HammondCare is holding for you or carried forward to be claimed in the next month.

Home Care Accounts are being set up for Home Care Package clients to give you greater transparency of your unspent funds, including the outstanding balance.

In the coming months we will start to provide you with the details of your unspent funds and where they are held. We will be able to report the balance of funds we are holding for you and the balance of funds held in your Government Home Care Account (Managed by Services Australia).

Over time, we will use the unspent funds (in the Home Care Account) for the your home care services. Eventually, it is likely that HammondCare will draw down all underspend funds in your HammondCare ‘account’, and we will no longer hold any funds for you.

For example:

Mary has $500 in underspend funding with Hammondcare. She utilised $1500 worth of services in July from a total Home Care Package funding for the month of $2200. Rather than claim the full $1500 direct from Government, HammondCare could use the $500 that is with HammondCare, and then simply claim the outstanding $1000 from Mary’s monthly funding. This means that the remaining $1200 of monthly funding would be held in her Government Home Care Account.

The Home Care Account is a reporting mechanism to help Home Care Providers manage the financial aspects of each client’s Home Care Package.

It is not something that is able to be accessed by clients or Care Managers, only the chosen Home Care Provider’s Finance Team.

The HammondCare Finance team have visibility of the balances held in each of the client’s Home Care Accounts. This amount is then shared with clients and their Care Managers on the Monthly Activity Statement.

Yes, you will still receive your Monthly Activity Statements as normal. These statements will be either posted to you or sent via email - dependent on your personal preferences.

Yes. This process will not change. You will be assigned the same amount of Government funding, as received previously.

No, this will remain the same since the last increase took effect on 20 September 2021. This process will not change. The rate will change again in March 2022 as set out by the Government.

Yes. This process will not change.

Charges are reviewed at each financial year with the next review due in July 2022.

There‘s a number of scenarios to consider:

  1. Each client will be charged an Exit Fee of $500 (or the lesser amount available in your package) if you have unspent funds available in your package that we are holding on your behalf.
  2. Each client will not be charged an Exit Fee if:
    • You have transferred to a new Home Care Provider
    • You do not have surplus funds sitting with us – as we will not be able to deduct the Exit Fee from the Home Care Account balance sitting with Services Australia.

Yes, you will still receive the full funding allocated to you based on your Home Care Package level, plus any supplements you are entitled too - such as Oxygen, or Veteran and Hardship payments.

From 1 September 2021, if your monthly Government Home Care Package funds are more than what was spent on delivering your services in a month, these unspent funds will be held in a Government Home Care Account for you until you need them.

If the full cost of care and services delivered in a single month exceed the monthly Home Care Package subsidy allocation (that is, the maximum claimable amount) we can recover the shortfall from any unspent funds held either by HammondCare or by the Government in your Home Care Account.

If no unspent funds are held by either HammondCare or the Government, the shortfall of costs will be covered by HammondCare in the interim and recovered in the subsequent month.

The intention here is to ensure that the cost of care and services remain within the allocated Home Care Package budget each month.

Yes, large purchases can continue to be made, given they meet the following conditions:

As per existing arrangements, any large purchases must be:

  • Related to your care needs
  • Agreed within your personalised Care Plan
  • Within the available budget for your personal package level
  • Accessed via unspent funds to pay for large purchases

Where the cost exceeds available funds, we can:

  • Postpone the purchase until there are sufficient funds to cover the costs
  • Enter leasing arrangements (where appropriate)
  • Agree to cover the cost through additional fees – such as top ups or private services

NOTE: The 5% procurement fee capped at $500 remains unchanged. This is only charged on goods purchased, such as the purchase of a wheelchair.

If you have an overspent account balance, this will continue to be managed on an individual basis dependent on each client’s circumstances, noting that the Improved Payment Arrangement changes do not alter existing arrangements between providers and clients. These will still pay for additional care and services over and above those that you may not otherwise be able afford under your package.

  • If you decide to transfer your Home Care Package from HammondCare to another Home Care Provider, we will transfer your portion of unspent funding to the new provider. However, the Commonwealth portion will be held by Services Australia and the Home Care Account funding will become available to the new provider on day 71 post the client transferring.
  • When you choose to exit your Home Care Package, we must process the refund of any unspent client portions directly to you or your estate – including any contributions made to the Basic Daily Fee or Income Tested Fee. Any provider’s unspent Commonwealth portions that are held will be returned to Services Australia. We have 70 days from your discharge date to do this.

Definition of key terms

The price is the amount that Home Care Providers report to Services Australia in their claim. Providers will report the price per client each month. Please note, Services Australia refers to the price as the invoice amount.

The definition of price is the cost of care and services provided to the care recipient (client) in the claim period, minus any Basic Daily Fee or other care fees charged (not including the Income Tested Care Fee).

Care fees charged include the Basic Daily Fee (if collected) and any additional service fees (if collected).

Providers must claim from Services Australia:

Providers must not deduct the Income Tested Fee payable from the price claimed. Services Australia will automatically deduct the Income Tested Care Fee payable from the payment made to providers. This is only for clients who are assessed as needing to pay it.

GST is not included in the price.

The shortfall amount is the price, minus any Income Tested Fee the client is assessed to pay.

The maximum contribution amount is the full Government subsidy entitlement and anything available in the client’s Home Care Account.

The Basic Daily Fee is an amount that everyone can be asked to pay. This fee is set by the Government at a percentage of the single basic age pension - this varies (from 15.68% to 17.50%) depending on each person’s Home Care Package level.

The Basic Daily Fee changes in March and September each year in line with the age pension. The current Basic Daily Fee (as of 20 September 2021) is shown below:

Basic Daily Fee Home Care Package Level graph

The Basic Daily Fee is added to the Government subsidy to increase the funds available to clients in their Home Care Package budget.

The Income Tested Fee is an extra contribution that some clients pay, as determined through an Income Assessment.

This fee is different for everyone, as it’s based on each client’s income, including their pension. However, full pensioners and people with an income up to $28,472.60 do not pay an Income Tested Fee.

These amounts change with indexation on 20 March and 20 September every year and are up to date as of 20 September 2021.

NOTE: If a client’s financial situation changes while they are receiving care, the Income Tested Fee can change.

This is the portion of available funds that the Commonwealth has contributed towards a client’s Home Care Package. This is via payment of funding for subsidy and supplements that the client is entitled to.

This is the portion of available funds the client receives towards their Home Care Package. It includes payment of Basic Daily Fees, Income Tested Fees and any top up amounts.

The Australian Government contributes a different amount for each level of Home Care Package. The Government subsidy for each package level is as follows:

Home Care Package level

Daily Government subsidy rate

Yearly Government contribution 

Level 1

$24.73

$9,026.45

Level 2

$43.50

$15,877.50

Level 3

$94.66

$34,550.90

Level 4

$143.50

$52,377.50

The Government contribution changes on 1 July every year. The above figures are up to date as of 1 July 2021.

Home Care Providers may be able to access further funding supplements from the Government in order to ensure clients receive the care they need.

These include:

  • Dementia and cognition supplement—for people with moderate to severe cognitive impairment
  • Oxygen supplement—for people with an ongoing medical need for oxygen
  • enteral feeding supplement—for people who need enteral feeding on an ongoing basis
  • Veterans’ supplement—for Veterans with a cognitive issue related to their service
  • Viability supplement—for those in rural and remote areas

HammondCare invites anyone who thinks they may be eligible for any of these supplements, to contact us about eligibility requirements.

On 1 September 2021, Services Australia will create a Home Care Account for each client, with a balance of $0. The Home Care Account cannot go into deficit.

From 1 September 2021, when Home Care Providers lodge their monthly claims the Government subsidy will be used to cover the price of the services received in the past month. If the Government subsidy is:

  • More than the price, the difference will accrue in the Home Care Account for future use
  • Less than the price, Services Australia will use any surplus funds in the Home Care Account to cover the difference.

A claim is when a provider submits a claim to Services Australia requesting a payment for services to a client. These claims are processed monthly.

An event is the process where a provider submits a claim or conducts any other transaction on the Services Australia portal – including:

  • Client entry
  • Client discharge
  • Client leave
  • Client’s unspent home care package Commonwealth Portion

This is the new process for how providers claim funding for their clients, based on the home care services clients have received in a given month.

This is the balance of funds available in a client’s Home Care Package. It shows how much of their funds have not been spent on care or services as yet. These can be held with their Provider or now in the client’s Home Care Account that is held by the Government.

This is a negative balance of funds in a client’s Home Care Package. It shows how much of their available funds they’ve spent.

This is a fee that we charge to cover the cost of Care Management

HammondCare is committed to providing clients with the highest quality care for people with complex care needs or living with dementia. We provide a dedicated Care Managerand specialist care management support to assist clients in navigating all aspects of their home care. This includes:

  • Completing care plan assessments, reviews and adjustments in the comfort of the client’s home
  • Helping clients to access available services and funding in addition to their package budget
  • Discussing and coordinating with clients, their carers and doctor to help manage their health at home
  • A dedicated phone support team, clients can call 24/7, including access to 24/7 nursing support for safety and peace of mind
  • Helping clients continue the activities they enjoy by developing practical support plan
  • Visiting and contacting clients regularly, to discuss if their care is meeting their needs
  • Coordinating a dedicated team of trained care workers for each client
  • A HammondCare Care Manager ensures a client’s home care is always at the highest quality, reducing stress or worry for them, their family or friends

This is a fee that we charge to cover the cost of Package Management.

Package Management is the ongoing administration and organisation behind a client’s Home Care Package. It may include the costs for:

  • Preparing monthly statements
  • Managing your Package funds
  • Compliance and quality assurance activities required for Home Care Packages

Clients receive consistent and professional care from highly-trained staff who are based in their local area. It means we can respond quickly, professionally and sensitively to people when they change their care requirements and are in need.

HammondCare does not charge a joining fee or a one-off assessment fee. Our charges are transparent and upfront. Clients can access additional management as their needs increase without incurring more charges.

HammondCare will only deduct an Exit Fee from a client’s leftover Package funds (held by HammondCare) when a client no longer needs their Home Care Package – for example, when a client moves into a residential care home. If a client decides to move to another home care provider, no Exit Fees will be deducted. Clients do not need to pay anything from their personal finances.

Large purchases are the purchase of items that are procured as part of their Home Care Package - such as mobility aids, mobility scooters or home renovations for accessibility.

All large purchases must be related to a client’s care needs and approved by the client’s manager.