From 1 July 2023, the subsidy rate for Home Care Packages will be increasing by 11.9% (including an increase for annual indexation). The purpose of the subsidy rate increase is to pass on the Fair Work Commission's 15% aged care award wage increase, to ensure there is no reduction in the provision of care and services to home care package recipients, arising from this decision.
Consultation and consent for price increase
The Department has prepared an Aged care worker wage rise – Home Care Packages Program fact sheet to assist approved providers with the implementation of the increase to subsidies. Importantly, approved providers cannot automatically increase their prices, in order to access these subsidies. Rather, they must first consult and communicate with care recipients about any increase and obtain their consent to a 'reasonable and justifiable' increase.
The Department has provided some guidance around when a pricing increase will be 'reasonable and justifiable' – which will be where it is commensurate to any increased cost of business associated with care delivery.
The Department is providing care recipients with a letter, which informs them about the increase in subsidies. Notwithstanding the Department doing this, it is the providers ultimate responsibility to update pricing and engage with care recipients in order to obtain their agreement to their home care agreement being varied.
The Department factsheet states that to adequately consult with care recipients, approved providers should:
- provide them with a copy of the Department's letter, in case they have not received a copy already;
- discuss with care recipients how prices for care and services delivered to them may change, including what prices are changing and when, why the prices are changing and what the increase in prices include;
- negotiate with the care recipient in relation to the price increase;
- update home care agreements with care recipients; and
- update the pricing schedules and ensure they are published on My Aged Care.
Approved providers cannot amend home care agreements, increase prices or access the increased subsidies without the consent of care recipients, so it is important for approved providers to have a plan to engage with care recipients in an open and transparent way, in order to obtain consent.
Considerations for Home Care agreements
This may be an optimal time to consider whether your organisation's home care agreement remains fit for purpose. Whilst many home care providers were holding off doing this work, pending the commencement of the new In-Home Aged Care Program, given the timeframe has been pushed back another 12 months, it might be timely to consider undertaking this task, at the same time as consulting with care recipients regarding any price increase.
Given that the reformed unfair contract term regime under the Australian Consumer Law, which includes significantly increased penalties for the use of unfair contract terms in standard form contracts, commences on 10 November 2023, this is an opportune time to ensure your home care agreements do not include unfair contract terms under this new regime.
If you think that you may seek to update your home care agreements prior to the unfair contract term regime reforms at the end of the year, or any time before the commencement of the In-Home Aged Care Program, now might be an opportune time to consider this, in order to avoid needing to consult broadly with care recipients in your service again at a later date.
If you would like to update your home care agreements, we have developed a template that can be adapted for your organisations requirements. Our template has also been reviewed by our Australian Consumer Law experts, and will comply with the unfair contract terms regime when it commences at the end of the year.
Please let us know if you would like to discuss this update, or if we are able to assist you in relation to the ongoing reforms.
