Exit amounts: What you need to know before February 2017

By Arthur Koumoukelis & Kimberley Vancuylenberg, Gadens Sydney

November 24 2016
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With recent changes to home care packages, it’s vital that you know what will happen to your exit amount come 2017.

Home care providers who intend to charge an exit amount under their home care agreements will be required to take steps to comply with transitional provisions before February 2017. Providers will also need to be ready to account for unspent home care package funds.

On 23 September 2016, the Aged Care Legislation Amendment (Increasing Consumer Choice) Act 2016 was registered to the Aged Care Principles and Determinations. From 24 September, transitional provisions relating to exit amounts in home care agreements commenced.

What is an exit amount?

An exit amount is a fee that an approved provider of home care can deduct from a person’s unspent home care package funds. From 27 February 2017, unspent home care package funds (less an exit amount) will be either transferred to another home care provider (if the person has transferred services) or returned to the government.

What are unspent home care package funds?

Unspent home care amounts represent the total amount of home care subsidy and home care fees paid (or payable) to the approved provider for the consumer that have not been spent for the period from:

1. July 2015 or the later date the consumer commenced receiving home care; and

2. The date on which the provider ceases to provide home care.

If a consumer ceases to be provided home care before 27 February 2017, any unspent home care package funds received before that date can be retained by the approved home care provider.

What are the transitional provisions?

1. An approved home care provider can charge an exit amount before the commencement of the amendments in February 2017 (if points 2 and 3 are followed). This applies to both existing and new home care agreements, provided that where an existing agreement is in place, it is varied by mutual consent;

2. The department must be notified of the maximum exit amount; and

3. The maximum exit amount must be made publicly available on My Aged Care.

The department has indicated that it will advise approved home care providers on how to provide notice on their maximum exit amount in the coming months.

The department also said this will not affect approved home care providers from being able to include exit amounts in any new or varied home care agreements before this time.

The reforms to home care implemented under the Aged Care Legislation Amendment (Increasing Consumer Choice) Act 2016 will commence on 27 February 2017.

Arthur Koumoukelis, partner and Kimberley Vancuylenberg, solicitor, Gadens Sydney

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