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With aged care wage increases funded by the Government, why are home care providers advising clients of increases to their HCP Pricing?
© Danielle Robertson Consulting Pty Ltd t/as DR Care Solutions
Home Care Package (HCP) recipients across Australia have received two letters this month (June 2023) – one from the Minister of Aged Care, The Hon Anika Wells MP, and the other from their in-home care service provider.
Both letters deliver news of the impact of the 15% wage increase for aged care workers commencing 1 July 2023[1].
The Minister’s letter
The Minister’s letter[2] (dated 25 May 2023) advises that,
“Everyone’s HCP will increase by 11.9% from 1 July 2023 to cover the cost of the wage rise and other increases in prices.”
In her letter, the Minister reassures us that the Australian Government is paying for this pay increase and for the workers to receive the pay increase, “your provider will likely need to increase what they charge for care and services such as nursing, personal care, in-home respite and cleaning.”
She then prepares us for further increases: “Providers need to cover the costs to deliver the service you receive from them. Wages are one component… Other costs may increase superannuation for their workers and necessary business overheads including fuel, marketing and administration costs.”
Your Home Care Service Provider’s letter
When referring to a Home Care Service Provider’s letter, a letter of one well-known national provider will be used as an example.
In their letter, this national provider prepares their in-home care recipient for an increase in their HCP hourly rates by making the following points:
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The Fair Work Commission’s recent wage increase decisions have led to a compounded 21.61% wage increase for all nurses and carers from 1 July 2023.[3]
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The employee superannuation guarantee paid by employers will increase 0.5% bringing a total superannuation guarantee contribution of 11% from 1 July 2023.
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WorkCover and general insurance premiums have increased.
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Compliance costs and supplier costs have increased.
The provider goes on to say, “as you can appreciate, there is a significant gap between the [Australian Government’s] proposed funding increase of 11.9% and the increased direct cost of care delivery of over 22%.”
“With the intention of transparency, we have made the decision to increase our hourly rates by approximately 15%, not passing on the full increase in employee costs [in their words over 22%] incurred with these changes. Instead, we have increased the care management fees[4] proportionally to help cover some of this additional cost further.”
The rub is in that last sentence. As at 1 January 2023, this national service provider’s care management fee was $401.93 per month for a Level 4 HCP. As from 1 July 2023, this fee will jump 70% to $686 per fortnight.
Back to the Minister’s Letter
The Minister tries to help us understand what is “a reasonable price increase” on the part of the service provider and admits that it may be “hard for you to know whether the price charged is reasonable or not”.
If you think the new pricing put forward by your provider is too high, she suggests you compare prices of other providers on the My Aged Care website[5] and speak with your provider. We at DR Care Solutions often hear from clients whose provider has been ‘price gouging’ particularly on case management or administration fees. We act as an independent advocate to right the wrongs or introduce a different provider to get the best outcome for our clients.
Interpreting service
It makes one smile to see the Minister’s letter comes with a flyer on “Interpreting Services” for aged care HCP recipients. English speakers may need assistance!
Need help caring for a loved one? Please feel free to call me, Danielle Robertson, at any time for an initial discussion on how to set up the right care, support and assistance at the right time and in the right place.
Resources
[1] DR Care Solutions: 2023 Federal Budget - Building A Workforce With A Wage Rise
[2] The Minister's Letter
[3] Comprising of the Fair Work Commission's 15% increase for aged care sector workers (announced in March 2023) and 5.75% 'cost of living' increase for all workers (announced in June 2023).
[4] Australian Government Department of Health and Aged Care: Home Care Packages Program Update - November 2022
[5] To compare providers you need to use the My Aged Care Provider Tool. Each provider must publish their current pricing on their website, though it's not easy to compare.
