Navigating aged care financial questions and quandaries

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Some of the more complex requests we receive to the Advocacy support line are about financial matters to do with the aged care services older people are receiving. Our specialist Financial Advocate, David, highlights the themes and subjects that commonly come up as queries.

David Thompson has been with Advocare as our Financial Advocate for almost 18 months. We asked him what the most frequent types of calls for financial assistance he deals with relating to aged care. He identified these as:

  • Paying back Home Care Package overspends
  • Concern over ongoing aged care costs in residential aged care homes
  • The amount the service provider is charging does not match up with the advice from Services Australia.

Paying back a package overspend

David says a common enquiry is linked to the older person (and often their family), not understanding the Home Care Package rules and regulations. A Home Care Package (HCP) is a complex arrangement to get your head around for anyone. A frequent question he’s asked is, “Why is the service provider asking me to pay for a package over-spend?”

“Many older people just pay assuming the over-spend was a result of their actions, however, after discussing with us, it becomes clear that it’s not the case that they should not have to pay this. Part of the provider’s management responsibility is to ensure the older person’s package budget can afford the care and services they need, without the client/customer exceeding their monthly budget, and it’s important to know that provider’s charge management fees to meet these responsibilities. So often it’s not justified that the provider is invoicing them for the overspent amount.”

David shared this scenario can also happen when someone changes to another aged care service provider as there’s a significant time frame before the subsidy is made available to the new provider after the older person leaves their previous provider.

“There’s a 70-day quarantining process, applied by the government in funding packages. For example, if I’ve just started with a new provider after leaving my previous provider and need to utilise my $10,000 of unspent funds balance urgently for some new equipment, I have to wait 70 days to allow for the exiting provider to tie up all the loose ends and claim from the package for services after the I have exited. This can be stressful if the older person requires the urgent item, however in some circumstances, there may be other ways to support this need while waiting for the quarantine period to end.”

How am I going to pay for all these aged care home costs?

All the costs associated with living in an aged care home can sometimes be overwhelming for someone who is grappling with the notion of how the system is supposed to be ‘affordable for everyone.’

A common issue is that the older person may not have ‘liquid assets’, but they may have a home as an asset. The intention may be to leave this asset to the older person’s children. However, sometimes to enter an aged care home, the only asset to pay for accommodation and other ongoing costs is the value of the family home. This can put a spanner in the works for the older person as they reconsider their financial position and the distribution of their assets.

“The residential aged care system has been a user-pays model for quite some time now with the intention to make it equitable for all older people regardless of their financial position entering a care facility. People don’t understand until they’re at the facility’s front door often following a health crisis, that to move into a residential aged care home they may need to sell their largest and sometimes only asset – their principal home,” David explains.
“I always recommend doing your research early so you can maximise your options and manage expectations, rather than being forced to do this in the face of a crisis where decision-making can be affected by stress and/or illness for all involved.”

Our Financial Advocate adds the reminder that it’s good to understand it’s a system based on individual financial circumstances. This means that when someone has their means-assessed; if they have low means, then the government system assists – whereas if they have high means, then they’re asked to contribute (i.e. the user pays).

Services Australia says I’ve reached my cap. Why am I getting charged?

This query comes up when someone is advised by Services Australia that they’ve reached their annual cap or the lifetime cap on their care co-contribution with their aged care provider, but they’re still being charged for services by the provider, etc. This lifetime cap means there’s a limit to how much the older person needs to contribute to the cost of their care. Once an older person reaches this cap Services Australia  advises the provider.

Essentially, they tell the provider to stop charging this person their care co-contribution as they’ll take over providing the full subsidy rather than via a co-contribution model. David says this is often a timing issue, with many stakeholders involved, there are sometimes delays due to the back and forth of information.

“People call us because their provider continues to charge them while the red tape is being sorted out, which means the person is later eligible for a refund, but some providers may delay paying that refund for a long time because they’re not certain of the information that’s coming from Services Australia.” Advocare then gets involved to help the older person understand what’s going on and then may support them by speaking with both parties to resolve the situation.

What does the future hold?

It’s no secret. The aged care system is complex. These are just a few of the issues Advocare hears about each week. However, there’s hope on the horizon for older people and the aged care providers we rely on in the future, particularly with the Aged Care Act Reform process currently in motion, and the recent findings of the Aged Care Taskforce Report to support positive change. David says he’s encouraged by the commitment from the government and the Department of Health and Aged Care for positive change to ensure high-quality care is available to all older people as our community requires. “It’s clear there’s an acknowledgement and a commitment to turning things around to help older people understand the complex aged care system better, which is great to see.”

Do you feel you have a possible financial issue with a service provider and need some support to make sense of what’s going on? Call Advocare on 1800 655 566. We believe our rights don’t diminish with age.