Income assessment for Home Care Packages
You need to have a formal income assessment from Services Australia or the Department of Veterans' Affairs (DVA) and should arrange this as soon as possible as this process takes time. You can ask for an income assessment before you start receiving care.
The income assessment is to work out whether you can be asked to pay an income-tested care fee towards the cost of your care.
Do I need to complete an income assessment form?
If you are paid a pension that is means-tested, you will not need to lodge an income assessment form as the Services Australia or DVA have sufficient information to work out your income-tested care fee. Examples of pensions that are means-tested include:
- Age Pension
- Disability Support Pension
- Service Pension
- Income Support Supplement
If you are paid a pension that is not means-tested or if you are a self-funded retiree you will need to lodge a Home Care Package Calculation of your Cost of Care form (SA456) with either the Services Australia or DVA. Examples of pensions that are not means-tested include:
- Blind Pension
- War Widow(er)'s Pension
- Veterans' Disability or Allowance
If you do not complete an income assessment, you can be asked to pay the maximum income-tested care fee.
To ask for an assessment, complete the Home Care Package Calculation of your Cost of Care form (SA456).
Complete an income assessment form
Start here if you haven't already had an income assessment for home care.
Services Australia works out if you have to pay an income-tested care fee and the amount of government help you may be able to receive based on your financial information. If you are a veteran or a partner/widow of a veteran who meets the below criteria, then the DVA will provide Services Australia with the relevant financial information to allow them to work out your income-tested care fee:
- veterans, their partners and war widow(er)s in receipt of one of the following income support pensions - Service Pension, Income Support Supplement or Age Pension administered by DVA
- veterans, and partners of veterans, in receipt of DVA Disability Pension and who have Qualifying Service (QS)
- war widow(er)s in receipt of the War Widow(er)'s Pension and who have QS
- former Prisoner of War (POW) or Victoria Cross (VC) recipients.
Services Australia is responsible for completing the home care income test assessments for all other DVA clients (e.g. Veterans or war widow(er)s who do not have QS or are not paid an income support pension by DVA).
For home care, the assessment is based on your income and does not include the value of your home or any other assets.
If you are part of a couple, half of your combined income is tested when working out your income-tested care fee, regardless of who earned the income.
What income gets assessed?
For the purposes of aged care, income is not the same as taxable income. Your assessed income can include but is not limited to:
- income support payments from the Australian Government such as the age pension, a service pension or an income support supplement
- deemed (not actual) income from financial investments
- net income from rental property
- war widow or widower pensions and some disability pensions (for more information refer to the 'Veterans' section below)
- net income from businesses, including farms
- superannuation and overseas pensions, and income from income stream products such as annuities and allocated pensions
- family trust distributions or dividends from private company shares
- deemed income from excess gifting.
An important note for pensioners: If you receive the one off payment of $750.00 – as part of the Government’s response to coronavirus (COVID-19) – it will not be counted as income. That means it won’t be included in income or means assessments for aged care.
Bank accounts and other financial investments are deemed to be earning a certain rate of income, no matter what income they are actually earning. Financial investments deemed to be earning income include but are not limited to:
- bank, building society and credit union accounts
- term deposits
- cheque accounts
- friendly society bonds
- managed investments
- listed shares and securities
- loans and debentures
- shares in unlisted public companies
- gold and other bullion
- account-based income streams from 1 January 2015.
Existing income streams in accounts held by income support recipients as at 31 December 2014 are assessed under the income stream rules that applied before 1 January 2015. If the account holder chooses to change products, or no longer receives an income support payment, the new rules will apply to them.
Investments not deemed to be earning income include:
- your home or its contents
- cars, boats and caravans
- antiques, stamp or coin collections
- standard life insurance policies
- holiday homes, farms or other real estate
- accommodation bonds, refundable deposits.
Under the deeming rules, the actual income earned on an asset is not counted. This means that if you earn more than the deemed income, the extra amount is ignored.
Current deeming rates are provided on the Schedule of Residential Fees and Charges.
Income-tested care fee
Your service provider may ask you to pay an income-tested care fee towards the cost of your care. This fee is different for everyone because it is based on your individual income. This fee is in addition to the basic daily fee.
This fee is listed on your monthly Home Care Package individualised budget and monthly statement.
There are annual and lifetime caps that apply to the income-tested care fee. Once these caps are reached, you cannot be asked to pay any more income-tested care fees. More information can be found on the Department of Health website.
The first fee notice you receive will be valid for 120 days unless there is a change in your circumstances. For example, if there is a change in your marital status or finances change, you will need to contact the Services Australia (or DVA). They will decide if this change requires a new assessment to be completed.
Your income-tested care fee can change over time if your income changes, or due to indexation changes.
Home Care Package costs if you received care before 1 July 2014
On 1 July 2014, the way costs are worked out for Home Care Packages changed. If you were receiving a Home Care Package before 1 July 2014, these changes do not apply to you and you may continue to be asked to pay your current costs.
Read more about Home Care Package costs if you started care before 1 July 2014.