The Income Tested Fee confuses many people. You are not alone if you don’t understand it. Hopefully the following information will help clarify what it is and when it’s applicable. If not, feel free to give one of our Care Experts a call to explain it in more detail.
1. How does the Income Tested Fee work?
Services Australia calculates an Income Tested Fee based on an assessment of the consumer’s financial information. This assessment does not include the value of your home or other assets. Based on this assessment the government may require you to contribute to your Home Care Package. This fee is different for everyone depending on the outcome of their assessment. Full Pensioners are not required to pay this fee at all. Individuals who are self-funded retirees or have a part pension may be required to contribute to their Home Care Package.
2. Is the Income Tested Fee mandatory?
If the government assesses you as having to contribute to your Home Care Package then you must pay an Income Tested fee. Your Provider is not allowed to waive this fee.
3. Who do you pay the Income Tested Fee to?
Although the government determines the fee the onus is on the Provider to collect it. This is where it gets confusing as it can seem like a Provider’s fee but it’s a fee that is collected on behalf of the government.
Here’s an example: Georgie is on a Level 4 package and is a self-funded retiree. The government has let her know that she must contribute to her own package and pay an Income Tested fee of $9.82 a day. A Level 4 package is worth $163.27 a day. In Georgie’s case, the government will only give her $153.45 per day. She will have to pay $9.82 to make up the difference.
So The Provider will be getting no more funding for Georgie’s package, they will just be getting some of the funding from the government and some of the funding from Georgie to make up the Home Care Package. The fee the Provider charges will still be the same, regardless of whether the client is required to pay an Income Tested Fee or not.
4. How do you find out if a fee is applicable?
To find out if a fee is applicable you can request a fee advice letter from Services Austalia before entering your Home Care Package or alternatively, you can do a Home Care Fee Estimator available on the My Aged Care website. This will provide you with an estimate of the fees the government will require you to contribute to your package. You can find the link to the fare estimator here:
5. If my income changes will my Income Tested Fee change too?
The government will do quarterly reviews of your fee conducted by Services Australia, and if your financial circumstances change you should contact them and ask for a review.
The Income Tested Fee is managed and run through the government, your Home Care Package provider is just required to collect it on behalf of the government to make up the total funds in your package.
6. Can I waive my Income Tested fee?
The government does not allow a client to waive the Income Tested fee and decide to have less funds for their Home Care Package. Home Care Package Providers do not have any choice in charging this fee if it’s applicable.
If you would like to find out more about whether you will be charged an Income Tested Fee, before you receive your Home Care Package, you can review this on My Aged Care: https://www.myagedcare.gov.au/income-and-means-assessments/
The website above has more information about the fee, why you will be charged it and what it is for.
Since the fee is mandatory and enforced by the government any questions in relation to the fee itself should be directed through My Aged Care or Services Australia as they are the organisations who dictate the fee you will be charged.
7. Is the Daily Fee the same as the Income Tested Fee?
No, the Daily Fee is something different. It’s a top up fee that Providers can charge a Home Care Package holder but it’s not mandatory at all. Whereas the Income Tested Fee is mandatory to be charged by Providers, and they cannot waive this fee. If you find out that you need to pay an Income Tested Fee, you will be required to pay this regardless of which Provider you choose. On the other hand your Daily Fee will be dependent on the Provider you choose.
Make sure to ask the Providers you are looking at about both these fees and ascertain which is which if they charge both the Daily Fee and the Income Tested Fee.
8. How do you pay the Income Tested Fee?
We collect your contribution with a Direct Debit. Once you have filled in the form we can automatically schedule the fee transfer to minimise hassle for you and make the process super easy. If you have any questions at all about the Direct Debit form or how it works, feel free to get in touch with one of our friendly Care Experts and they can explain the process in more detail.
We hope this has helped you understand the Income Tested Fee and if you have any other questions feel free to contact us. For more on our fees, check out our pricing page: https://letsgetcare.com.au/pricing/