The myth of cheaper self-managed home care

Article published 10 February 2023

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From 1 January this year, providers of home care packages can no longer charge more than 20 per cent of your package level for care management and no more than 15 per cent of your package level for package management.

All up, you could be paying 35 per cent of your package level before you see any actual care.

If this seems steep, the 20 and 15 per cent caps have been put in place to stop providers charging even more. It’s supposed to be an improvement, in other words.

Take the case of a CPSA member who contacted us late last year to ask what could be done about 47 per cent of his wife’s level 4 package being eaten up by care and package management charges. That was 47 per cent of $52,000 a year, well over $24,000.

His specific question was: “Could you advise whether I would be able to ditch the provider and employ carers myself using that threshold, so leaving funding for other options (or more hours)?”

In response, we pointed out that from 1 January he could expect a reduction in care and package management charges of between $5,000 and $6,000 a year. He could also try and find a less greedy Home Care Package provider.

Changing your provider has become easier since 1 January as a result of a ban on the infamous exit fees providers could charge to deter you from switching to a better provider.

But the CPSA member was really asking if ‘self-management’ would mean that his wife would have more to spend on care hours.

Self-managed care is at the centre of the Department of Health’s thinking on how to combine the Home Care Package program and the Commonwealth Home Support Program.

In the Department’s mind, there is a groundswell of demand for self-managed care. CPSA thinks the Department’s got that wrong. There’s a groundswell alright, but CPSA believes it is a groundswell of people wanting providers not to rip them off.

Obviously, putting in place price caps of 20 and 15 per cent helps to curb the enthusiasm of the greediest providers, but it also gives the green light to providers who were charging less than 20 and 15 per cent to increase their charges to the new max.

Back to the CPSA member’s question whether self-management of his wife’s package would free up more money.

The short answer is: yes, although far less than you might think.

Because what does self-managed care actually mean?

As mentioned, the Department of Health distinguishes between ‘care management’ and ‘package management’.

Care management is about making sure that a care recipient’s package delivers what it is supposed to deliver. A substantive care management task is to “regularly assess the person’s needs, goals and preferences”.

It seems very pricy to charge 20 per cent of someone’s package level for care management on a continuous basis. Surely, this is not a daily task?

Care management is a mandatory service. Mandatory for providers to deliver, mandatory for a care recipient to pay for.

And this applies to care recipients who self-manage their care, too.

In other words, you can’t self-manage your care management.

Your care management is going to cost you one-fifth of your package level, unless you can find a provider who has been able to resist charging the maximum 20 per cent allowed.

You can self-manage much (but not all) of your package management. Package management is basically hiring and firing staff, buying any equipment and such like.

People often view package management as limited to finding staff they like, but a lot more goes into it. What if your regular staff rings in sick? It’ll be up to you to find a replacement. You’ll have to make sure staff get paid.

Some package management you won’t be able to do, such as interacting with Services Australia about claims, although that’s being looked into.

It’s very likely that a package provider will charge for those parts of package management you let them handle. Up to 15 per cent, in fact.

But there are things you can do yourself, such as the hiring and firing of staff. Will that save you money?

To recruit staff you will almost certainly need the services of an online staff recruitment platform, which vets workers advertising their services on the platform’s website.

A typical arrangement is for the recruitment platform to require the worker to pay 10 per cent of their wages. The platform also typically requires your provider to pay 5 per cent of the worker’s wages.

But effectively you will be paying that on top of the care management and package management fees charged by your provider.

So, you could be paying in excess of the 35 per cent maximum mandated by legislation.

Online platforms obviously have a few approved providers lined up who will make it cheaper, but who effectively will be doing little if any care management and the absolute minimum in package management.

If you want to get the most out of your Home Care Package, the best way is to look around for the best fully managed deals and take your business to whichever provider offers it.

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