A common question being asked by home care providers is whether they should be charging their consumers a Daily Care Fee. According to the Home Care Packages Programme Operational Manual, a provider can charge up to a maximum fee of 17.5 per cent of the basic rate of the single pension.
Before deciding whether or not to charge the Daily Care Fee here are some things to consider.
DO THE ADMINISTRATION COSTS OUTWEIGH THE ADDITIONAL INCOME GENERATED?
Charging a Daily Care Fee does increase administration hours. You have to invoice each consumer, generate a monthly statement, send it out and collect the money if not using a direct debit system which all contributes to additional administration costs.
However, you can increase your margin if you base your administration and case management fee on the total income including the Daily Care Fee.
Let’s work an example:
You have 100 packages and charge an administration fee of 20% and a case management fee of 15%, the maximum daily care fee is $9.85 per day (from 20 September 2015).
Therefore the calculation is as follows:
100 packages x $9.85 per day x 365 days:
Additional funds from charging a daily care fee$359,525
Additional income generated:
20% Admin Fee – (20% x $359,525)$71,905
15% Case Management – (15% x $359,525)$53,929
Total additional income$125,834
Balance for consumer services$233,691
If you’re not including the daily care fee in your administration and case management fee calculation, you are creating extra work which costs money and not generating any additional income as an offset. It will simply provide additional funds for the consumer to spend on services that you will have to arrange.
Care Collaborator allows you to charge a set fee based on the following calculations which can be varied for each consumer if required:
- A flat fee up to a maximum of $9.85 per day; or
- A percentage up to a maximum of 17.5% of the basic rate of the single pension.
This makes the charging of a daily care fee very easy and provides the consumer with clarity on the amount they will contribute to their package on a monthly basis.
Care Collaborator simplifies the process and provides transparency making it easy for you to finalise the Home Care Agreement with the consumer at the initial visit and start services immediately.