Reforms to Aged Care legislation taking effect from 27 February 2017 will see home care packages moving with the consumer if they change home care providers.

These reforms are part of the first stage of the Commonwealth Government’s reforms to the home care system.

Under the current system, home care places are allocated to individual providers to deliver services in a particular location or region. If a consumer decides to change provider, any unspent funds in the consumer’s home care package can be retained by the provider.

What will change?

Under the reforms, funding for a home care package will instead follow the consumer if they decide to change provider. This is in line with the concept that a home care package belongs to the consumer, and is aimed at minimising financial disincentives to changing providers.

Consumers will get greater choice and flexibility if they decide to choose a new provider and providers will also no longer have to apply for new home care places through the Aged Care Approvals Round, thereby reducing red tape.

The reforms also allow for the provider to charge the consumer an exit fee to be deducted from the consumer’s unspent home care funds.

What should providers do if they want to charge an exit fee?

It is not mandatory to charge an exit fee but, if providers do want to recover the administrative costs associated with determining and making payment of unspent home care amounts, they can do so via a pre agreed exit fee.

Providers should note the following in relation to exit fees:

  • If a provider intends to deduct an exit fee on or after 27 February 2017, the provider must first notify the Department of Social Services of the maximum exit fee. The Department will then publish these details on My Aged Care.
  • The home care agreement must set out the maximum exit fee that the provider intends to deduct and be agreed to by the consumer. Exit fees can be included:
    • in new home care agreements entered into prior to or after 27 February 2017 (as agreed between the consumer and provider); and
    • In existing home care agreements if they are varied by mutual consent and consultation between the consumer and provider.
  • Within 56 days of a consumer leaving a provider, the provider must notify the consumer of the exit fee deducted from the unspent funds.
  • The exit fee must not be more than the consumer’s unspent home care funds, to avoid the consumer going into debt.

When can providers start charging exit fees?

Exit fees can only be charged on or after 27 February 2017. Providers, however, can already specify exit fees in home care agreements, provided they give notice to the Department.

How can we help you?

Panetta McGrath Lawyers can provide further guidance to aged care providers in relation to home care packages and exit fees.