Open letter to Anika Wells, Minister for Aged Care

Article published 28 April 2023

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Open letter to Anika Wells, Minister for Aged Care

Transition to the new In-Home Aged Care Program



CPSA is a non-profit, non-party-political membership association founded in 1931 which serves pensioners of all ages, superannuants and low-income retirees. CPSA’s aim is to improve the standard of living and well-being of its members and constituents.

CPSA writes to you to express its concerns about the new In-Home Aged Care Program (IHAC) which is under development and which will become the single home care program from 1 July 2024, providing care to people currently accommodated under the Commonwealth Home Support Program (CHSP), the Home Care Packages Program (HCPP) and the short-term restorative care program. CPSA’s concerns are shared by many CHSP providers. These providers have expressed their concerns and anxieties to CPSA, which is itself a CHSP provider of Sector Support and Development (SSD), in response to a series of online newsletter articles written for CHSP providers.

A concern CHSP providers express is that they are in the dark about how the new program will work and what they need to do to ensure they can transition to this new program in an orderly fashion and can keep providing services to their clients.

Most commentators agree that the new home care program (IHAC) as a service provision model will most likely be a hybrid of the current Home Care Package Program and the NDIS. Both discussion papers on the new home care program published by the Department of Health and Aged Care say that the new home care program will feature activity-based funding, with block-funding available where activity-based funding won’t work.

CPSA’s interpretation is that community transport, meal services, social support groups and cottage and centre-based respite will all continue to be block-funded under IHAC. However, the Department has not provided certainty about this.

Neither has the Department defined which areas in Australia it considers thin markets, where CHSP providers will continue to be block-funded under IHAC.

CHSP providers, the October 2022 discussion paper says, will assist in implementing care plans drawn up following independent assessments. These care plans will come with a set budget. It is not clear whether this means Home Care Packages will no longer exist or whether they will change. Neither departmental discussion paper is explicit about this.

Given the introduction of activity-based funding and the ability of care recipients to choose their own provider or providers, IHAC providers will work within a competitive structure. CHSP providers point to the fact that current Home Care Package providers are already working under activity-based funding and will therefore be at a competitive advantage when IHAC starts on 1 July 2024.

CHSP providers are also concerned about how clients’ personal contributions will change under IHAC. Although the Department of Health and Aged Care has published two discussion papers so far, neither paper covered personal contributions under IHAC.

CPSA assumes that, since there does not seem to be enough time for the Department to put together a new personal contributions system by 1 July 2024, the way personal contributions are calculated under the current HCP program will be the way they will be calculated under IHAC.

The CHSP works with a principles-based Client Contribution Framework, which means providers must make a judgment call on their clients’ ability-to-pay. The average per capita personal contribution by HCPP clients in 2019-2020 was two-and-a-half times higher than that of CHSP clients. While this calculation does not take into account the higher and more expensive levels (HCP 3 and 4) of care provided through the HCPP, it is clear CHSP clients pay a lot less than HCP clients. Providers are concerned many of their clients will not be able to afford the personal contributions IHAC requires.

The HCP program charges every client a Basic Daily Care Fee. This Basic Daily Care Fee (currently $10.18 for HCP1 and $12.14 for HCP4) is payable every day of the week. Even if a client only receives a service on one day of the week, they will be charged seven Basic Daily Care Fees a week.

CPSA understands that many HCP providers waive the Basic Daily Care Fee, although it is possible providers make up for it by charging excessive admin and management fees. These latter fees have been capped from 1 January this year. It’s too early to tell whether charging of the Basic Daily Care Fee has increased since then.

In addition to the Basic Daily Care Fee, the HCP program features an income-tested care fee structure. Whereas the CHSP Client Contribution Framework raises a proportion of the actual cost of a unit of service provision, the income-tested care fee structure does no such thing. It works out how much a client is able to contribute to the overall cost of the care they receive. This is an important difference with the CHSP Client Contribution Framework.

Any single person whose annual income exceeds $31,140 a year could be up for an annual income-tested care fee of $6,341 (annual cap) on top of the annual minimum basic daily care fee amount of $3,971.

CPSA requests that you urgently respond to the following questions:

Under IHAC, will community transport, meal services, social support groups and cottage and centre-based respite be block-funded? If not, what will the criteria be for these services to be activity-based funded or block-funded?

Can you reassure current CHSP providers by advising how their transition to IHAC will be structured so that they have adequate time to get used to activity-based funding in a competitive environment?

Can you advise what the personal contribution arrangements will be under IHAC? Will it be an exact replica of the current HCPP arrangements or will there be a new system of means testing for IHAC, and, if the latter, what is the detail of this new system?

CPSA and more than 1,400 CHSP providers await your response.

Yours sincerely

Brian Buckett

CPSA President

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