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Home Care Packages (HCP)

A Home Care Package (HCP) is a government-funded program that provides older Australians with subsidised in-home care, making support services more affordable. The government covers part or all of the costs based on your eligibility. Services include personal care, nursing, meal preparation, and home maintenance, with four levels of funding tailored to individual needs. Depending on the services you wish to access, you may need an income assessment or an income and assets assess-ment to determine your contribution.

Government Contribution & Income Testing for Home Care Packages (HCP) – Explained Simply

The Australian Government pays a subsidy toward your Home Care Package (HCP) to help cover the cost of in-home care. The amount the government contributes depends on your approved package level (1 – 4) and whether you need to pay an income-tested fee.

How Much Does the Government Pay?

The government funds four levels of Home Care Packages, with higher levels providing more support. As of 2024, the approx-imate annual subsidy for each level is:

  • Level 1 – $10,698.15 per year (basic support)
  • Level 2 – $18,812.10 per year (low-level care)
  • Level 3 – $40,945.7 per year (intermediate care)
  • Level 4 – $62,075.55 per year (high-level care)

(These amounts are indexed yearly, so they may change over time.)

You do not receive the money directly—it is paid to your chosen home care provider, who manages your care plan and services.

YES Weekly Package tiers

This table is based on receiving the full Age Pension → No income test.

Level 1 Level 2 Level 3 Level 4
Weekly Home care package subsidy $205.18 $360.79 $785.30 $1,190.55
15% Weekly Package management fee - $30.77 - $54.12 - $117.79 - $178.58
Basic Daily Fee - 0.00 - 0.00 - 0.00 - 0.00
* * Estimated Support per week 2.50 hours 4.50 hours 9.50 hours 14.50 hours

** Estimated Weekly hours of support per week based off an average of $68.00per hour charged for Personal care, Domestic assistance, Community Access, Respite and Gardening.

Who Has to Be Income Tested?

Everyone can get an HCP regardless of income, but some people may need to pay an extra “income-tested care fee.“

  • If you receive a full Age Pension → No income test, and the government covers all costs (except the basic daily fee, which many providers waive).

If you’re on a part Age Pension or self-funded → You must do an income assessment, and you may need to contribute to-ward your care. The amount you pay depends on your income assessment. For a FREE income assessment , contact Services Australia (CentreLink) or visit MY Aged Care.

How Does the Income Test Affect Government Funding?

If you are above the income threshold, you may have to pay an income-tested care fee, which reduces the amount the government contributes to your package.
  • Lower threshold (part-pensioners) → Maximum $6,543 per year out-of-pocket
  • Higher income (self-funded retirees) → Maximum $13,087 per year out-of-pocket

Caps apply, so you won’t pay more than these amounts in a year.

(Homeowners are pay the income-tested care fee usually not required to include their home in the income test.)

If you are above the income threshold, your out-of-pocket expenses are paid as an income-tested care fee, which reduces the amount the government contributes to your Home Care Package (HCP).

How Are the Out-of-Pocket Costs Paid?

  • You receive an income assessment from Services Australia (Centrelink), which determines how much you need to contribute.
  • You directly pay your home care provider, usually on a fortnightly or monthly basis
  • The government adjusts its contribution accordingly, meaning the higher your income-tested fee, the less subsidy the government provides.

Example Breakdown

Let’s say you are approved for a Level 3 HCP, which has a government subsidy of $39,310 per year:

  • If you are a full pensioner, the government pays the full $39,310 to your provider, and you may only pay a small daily fee (which many providers waive).
  • If you are part-pensioner, and your income test determines you must contribute $3,000 per year, the government will now only contribute $36,310 instead.
  • If you are a self-funded retiree, and your income test says you must contribute $10,000 per year, the government will now only contribute $29,310 instead.

Important Notes

  • You only pay the income-tested care fee if your income is above the threshold.
  • There are annual and lifetime caps to prevent excessive fees.
  • Your contribution is separate from the basic daily fee, which some providers waive.
  • If your financial situation changes, you can request a reassessment.
  • If assessed, you must pay the income-tested care fee — it is not optional.
  • The government’s subsidy is reduced based on what you are required to contribute.
  • If you do not pay, your provider may limit or stop services.
  • If you are struggling financially, hardship provisions may apply.
  • You pay the income-tested care fee directly to your provider.
  • Your provider must record and report these payments as part of your HCP budget.
  • The government adjusts its contribution based on your assessed fees.
  • You receive a monthly statement showing how funds are allocated.