Is Support At Home worth it for self funded retirees?

Hal Swerissen

The brand new Commonwealth Support at Home program for people aged 65 and over assists them to continue to live at home when they need support. But the new program dramatically increases the financial contributions that older people have to make for these services, particularly for older people with more money.

As a result, self funded retirees, who only need basic domestic services like cleaning, minor home maintenance, laundry and gardening, are probably better off financially if they get these services privately rather than through the new Commonwealth Support at Home Program.

But making this decisions requires navigation through the Commonwealth’s bureaucratic labyrinth of assessment, means testing and co contributions to sort out the comparative costs of private vs public domestic support. That includes an eligibility assessment of your support needs and an income and asset assessment to determine your co contributions. 

The Support at Home Program has 8 levels ranging from $11,000 for level 1 to $78,000 for level 8. It provides three types of support: every day living, independence and clinical care.

Clinical care includes nursing and allied health. Clinical care is free for everyone.

Independence support includes personal care, social support, transport, home modification, respite care and some therapeutic services.

The co contribution for independence support is 5% for a full pensioner, and between 5 and 50% for a part pensioner and fully self funded retirees eligible for a Commonwealth Health Card. Self funded retirees who are not eligible for the Commonwealth Health Card pay 50% of their independence support costs.

Every day living supports include domestic assistance such as cleaning, laundry and gardening; home maintenance and meals. 

Co contributions for every day living supports are 17.5% for full pensioners, and between 17.5 and 80% for a part pensioner and self funded retirees eligible for a Commonwealth Health Card. Those not eligible for a Commonwealth Health Card, have to pay 80% of the cost of every day living support.

In practice all self funded retirees will pay at least two thirds of the cost of every day living support on a sliding scale up to the maximum of 80% depending on their assets and income.

Detailed figures aren’t available yet, but around half of all packages are likely to be levels 1 to 3. Most of the cost of these packages is for every day living support. 

The problem is that the hourly rates charged by Support at Home providers are generally 50% higher than in private sector because Support at Home Providers load their costs with administrative and care management charges. To be fair to them, much of these costs are the result of the bureaucratic and regulatory requirements they have to meet to be registered by the Commonwealth. Private domestic service providers don’t have these costs.

Between 20 and 30% of people aged 65 and over are fully funded retirees and growing as superannuation becomes more prevalent. This group is therefore likely to be financially disadvantaged by taking up low level packages for every day living support compared to meeting their needs through private services.

Of course, cost is not the only consideration and self funded retirees who only need basic domestic services are caught between the devil and the deep blue sea. Many will choose to pay the higher costs of the Support at Home Program and put up with the program’s complex, inefficient bureaucracy in case they need independence support and clinical care as they get older and become more dependent.