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Increasing Choice in Home Care

Your guide to Increasing Choice in Home Care, what's changing and how it'll affect you.

As Australia’s population continues to age, it’s increasingly vital that older Australians are able to access the home care services they need. To ensure this occurs, the Increasing Choice in Home Care (ICHC) reforms, which are set to commence on 27 February 2017, are designed to increase home care choices for older Australians and provide them with timely access to home care assistance. The ICHC reforms are a continuation of the Consumer Directed Care reforms (coming from the Living Longer Living Better legislation).

So what are the ICHC reforms and how will they affect you and Australia’s aged care system as a whole? Read on to find out.


What is Increasing Choice in Home Care?

Increasing Choice in Home Care (ICHC) refers to a set of aged care reforms that will come into action on 27 February 2017. These changes are designed to give older Australians greater choice, flexibility and control over the home care services they receive, as well as how those services are delivered.

The 2017 reforms will introduce a new phase of the Consumer Directed Care (CDC) system. Under the reforms, which were introduced as part of the Increasing Choice for Older Australians 2015-16 Budget Measure, key legislative changes will allow you to take charge of your own home care package.

There are several key changes to be aware of:

  1. Funding will follow you. Under Australia’s current aged care system, home care services and funding is allocated to individual care providers that have been approved to deliver services in a particular region or area. Under the 2017 ICHC reforms, home care package funding will follow you, the consumer. This means you will be able to choose the home care provider that best meets your needs and direct the funding their way. And if you’re unhappy with the level of care you receive or how much it costs, you will have the freedom to switch providers.
  2. Home care packages will become portable. Under current legislation, home care packages are allocated to approved providers, meaning that the provider retains any unspent funds if you leave their care. Under the 2017 reforms, home care packages are portable and if you change providers unspent funds will go with you to the new provider. However, providers will adopt more of a “use it or lose it” philosophy, meaning the build-up of unspent funds will decrease.
  3. Access to home care packages. The reforms will introduce a consistent national approach to prioritising access to home care through the My Aged Care gateway. This system will take into account the needs and living circumstances of consumers as well as how long they have been waiting to access home care, providing a more equitable distribution of home care packages no matter where you live.
  4. New package levels. Under the current system, consumers are approved for home care in broad bands (level 1/2 or level 3/4). The new system will take into account individual needs and circumstances, with Aged Care Assessment Teams approving consumers for care at a specific package level: 1, 2, 3 or 4.
  5. Simplified processes for home care providers. The process to become an approved home care provider will be streamlined and simplified. This means that approved providers of residential care and flexible care will be able to “opt-in” to become a home care provider rather than having to deal with the red tape of a full application process.

The introduction of Consumer Directed Care

Following the success of a 2010-11 pilot of CDC within the former Community Aged Care Package Program, all newly released Home Care Packages from 1 August 2013 had to be delivered on a CDC basis.

Rather than being a completely new type of home care package, CDC instead changed the philosophy of service delivery. Whereas in the past the focus was on the service providers, CDC allowed older Australians to get more of a say when choosing the home care services they needed. Rather than allocating funds to service providers, from February 2017, home care packages will be allocated directly to the consumer. This allows consumers to work in partnership with providers to decide on a care plan that’s right for them.

The benefits of CDC include:

  • Greater control for consumers over their own lives
  • Greater choice for consumers of the type and delivery of home care services they receive
  • The ability for consumers and providers to co-produce care plans
  • Increased transparency for consumers about the funding available under their aged care package and how that money is spent
  • The ability for consumers to make informed decisions about the care that is best for them

The effect of the ICHC reforms on home care providers remains yet to be seen. CDC has resulted in increased technology spending and reduced profitability, due to increased competition amongst providers and pricing reductions. Data from 2016 has shown that the introduction of CDC has led to declined profitability for home care service providers, headlined by higher administration and case-management costs. It has been suggested that this could result in less face-to-face hours for home care recipients, however, the freedom to switch to another approved provider will give consumers the freedom to choose based on the quality of the care they receive.

With this in mind, the increased competition the reforms hope to foster in the home care industry should be good news for consumers, but it may affect the bottom line of some home care providers. It’s also likely that providers will introduce a commencement fee (around $500) and an exit fee ($250-$1,000) for clients, to cover administration costs in these areas.


Why have we changed to this system?

The introduction of CDC was all about giving older Australians more control over their own lives. The Commonwealth Government’s Living Longer Living Better aged care reforms identified the need among people receiving care at home for greater choice, transparency and flexibility.

As a result, CDC is designed to provide increased choice and allow you to access the home care services you want. The 2017 ICHC reforms are simply the latest development in the creation of a better CDC system, letting you choose the provider you want so that you can receive the care you need.

While CDC is currently only available in the home care system, the Government has previously indicated plans to introduce CDC into the residential aged care system in the future.


What happens to unspent funds and how is this changing?

As of 27 February 2017, home care package funds will follow the consumer. This means older Australians will be able to choose the provider that’s right for them and also switch providers if they wish. When a consumer decides to make a change, any unspent funds will move with them to the next provider.

The unspent amount is calculated for the period between:

  • Either 1 July 2015 or the date when you started receiving home care from a provider (whichever is later).
  • The date of cessation, which is the date that the provider stopped providing home care to you.

As part of the ICHC reforms, if you choose to switch home care providers, your unspent funds must either be:

  • Transferred to your new home care provider.
  • If you have left home care, returned to the Commonwealth and you (or your estate if you have passed away).

Any home care fees paid in advance are not included in the unspent amount, so they must be refunded by the provider. Providers have 56 days after the cessation date to provide you with a written notice about your unspent home care amount. They must also transfer the relevant unspent home care amount within a specified time period, usually a maximum of 70 days but it can differ in some circumstances.

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Picture: Shutterstock

Tim Falk

A freelance writer with a passion for the written word, Tim loves helping Australians find the right home loans and savings accounts. When he's not chained to a computer, Tim can usually be found exploring the great outdoors.

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