Jan 25, 2022

Why it’s vital to know the true cost of aged care at home

True cost of aged care

In response to recommendations from the Royal Commission into Aged Care Quality and Safety, the government is developing a Support at Home Program.

Even with changes to the funding models around aged care, it is difficult to see improvements in the delivery of home care without addressing the urgent need for skilled workers and their pay rate. 

Due to start in July 2023, the program will replace home care packages, the Commonwealth Home Support Programme (CHSP), short-term restorative Care, and residential respite programs.

The government is consulting on key areas, including improving the way people are assessed and achieving better alignment between assessed care needs and funding.

Other design elements highlighted as needing attention include improved support for informal carers.

Even with changes to the funding models around aged care, it is difficult to see improvements in the delivery of home care without addressing the urgent need for skilled workers and their pay rate.

It’s well known that most people’s preference is to remain living in their own home.

More than 1 million people are receiving government-subsidised care to assist with the activities of daily living, which keep them living as independently at home as long as possible. However, many of those people and others are missing out on the care they need – either because the help is not available or they are not prepared to pay for it.

Before the pandemic, being unable to stay at home often meant an unplanned move to residential care. Now, with several facilities closed to new admissions or locked down, social isolation and sporadic care is rife.

Key to keeping people at home is the support they receive.

In part this is because providers are putting up their costs to attract workers. Others are charging questionable case management fees.

Where previously it was possible to squeeze 18 hours of help a week from a level four home care package, the average number of hours is now 14.

People seeking carers privately – through online platforms such as mable.com.au or careseekers – have also noticed an increase in the rates workers are setting for themselves. This reflects the value they place on their work as well as the availability of suitably skilled carers. If the carer’s personality and skill level meets someone’s needs, then they have to be prepared to pay.

The Fair Work Aged Care Award wages – for what can be extremely exhausting work, physically and mentally – have always been low.

Hourly rates start at $21.62. Providers then charge clients upwards of $60 an hour depending on the time and day.

COVID-19 has clearly imposed major financial and other changes on many members of the superannuation fund HESTA, whose members dominate the aged care workforce.

In its State of the Sector Aged Care Workforce Insights, HESTA reaffirmed that improving pay, conditions and skills development were key to ensuring high-quality, sustainable jobs and how valued care workers feel.

A telling quote by a survey respondent was: “We’re in the middle of this pandemic and you’ve got hospital workers being seen as the heroes and somehow aged care workers are the villains.

“These people are looking after our family and friends for next to nothing and yet we don’t value them or want to pay them properly. Something has to change.”

Former high court judge Patrick, 97, lives alone on a healthy defined benefit pension of about $15,000 a month and discovered pretty quickly how much it would cost to remain in his own home.

After a long hospital stint he was discharged to home on the proviso he got help with showering, dressing, meals, cleaning and transport.

Even with significant care needs, he was assessed and approved for a Level 2 home care package worth about $19,600. Financially it made more sense to reject the government help and pay for everything privately. Three home visits each day is costing him about $2,800 a week. The reality is that he will soon need someone there all the time and the costs will be at least triple.

DR Care Solutions founder and director, Danielle Robertson, says 24-hour live-in care costs between $5,500 and $10,000 a week depending on the worker’s training and whether they come via a provider or are employed privately.

She has noticed the increased strain on home care providers in this latest COVID-19 outbreak, with carers either catching the virus or being close contacts. It’s beyond a joke, she says.

The number of Australians aged 85 and over is expected to increase from 2% of the population to 3.7% by 2058.

According to Deloitte Access Economics modelling, to maintain current staffing levels, the 2020 workforce of 186,130 direct care aged care staff would need to grow by 70% to meet workforce 2050 requirements, meaning more than 130,000 additional full-time equivalent professionals. The royal commission indicated this number will be even higher if the recommended reforms are implemented.

Home care reforms are good, but aged care workforce reforms are also critical.


Bina Brown is a director of Canberra-based aged care solutions company Third Age Matters

Email Bina at bina@thirdagematters.com.au

Republished with permission. Originally published by The Australian Financial Review

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  1. Hi,
    I am a S.A.registered nurse working in the field of caring for our elders.
    I would like to know how your home based care is assessed and the tools used to assess.
    Following the above: what your levels of care specify

  2. This let it rip attitude with Home care funding must change. The value for money theory is long out the window with Home care Providers charging what they want. Residential care has every fee,charge and wages dictated by the federal government so why has the home care been able to rot on top of the ground?

    At this point we have people waiting for home care, people getting home care that they don’t have a legitimate need for, people getting home care with needs that should be supported in residential care and home care providers coming up with new ways to charge every minute.

    The federal government is supposed to manage this but clearly they are MIA. Don’t start me about the billion plus dollars sitting in peoples bank accounts unspent and unrecoverable!


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