With the commencement of the Support at Home Program being deferred until 1 July 2025 many home care providers will be looking to adjust their prices for the 2024-25 financial year.
Providers are reminded that there are strict rules that must be followed when increasing their service charges, package management or care management fees. Providers will of course be aware of the fee caps which apply to care and package management fees. However just as importantly, providers cannot simply impose a price increase on consumers. Likewise, it is not enough to simply let consumers know of an impending increase by writing to them to give notice of this.
Under the legislation, namely the User Rights Principles, a provider can only vary the terms of their client agreement following adequate consultation and even then, only with the client’s consent. As such, if a fee adjustment is not clearly stipulated in the agreement, or the provider is looking to increase their service charges by more than the agreement allows, the provider must consult with the client and obtain their consent.
Providers looking to increase their prices, whether care or package management charges or service charges must either ensure that either:
- The proposed increase is in line with a clear fee adjustment clause in their client agreement. Importantly, this clause should:
- Outline a prescribed formula or amount such as CPI or a fixed percentage by which fees can be increased.
- Include a clear trigger for the increase, be it a given date (eg 1 July) or the provider giving notice of the increase.
Vague clauses such as “fees may be increased by giving 28 days’ notice” are unlikely to be sufficient.
- They consult with the consumer and obtain their consent to the change. Importantly, a consumer’s consent will only be valid if the consumer is given a genuine choice as to whether they agree or not and it is not generally acceptable to terminate a consumer’s agreement because they don’t agree to an increase.
- Russell Kennedy recommends that any consultation on fee increases be done by way of written communication as well as a conversation with the consumer to discuss the impact of the proposed fee increase on that specific consumer and their budget.
- For example, the provider should send their consumers a copy of their proposed Pricing Schedule and then contact each consumer to discuss this and ensure they understand and accept it prior to applying the new prices.
- Providers can be subject to consumer complaints and compliance action by the Aged Care Quality and Safety Commission if they do not comply with requirements set out above. Home care fees remain a key source of complaints and increasing fees is an area where providers can easily go wrong.
We are here to help
Please reach out to Anita Courtney or Solomon Miller or a member in our team if you need advice on how you can increase your fees. We can provide template consultation letters and checklists and assist you to understand what your agreement allows and make necessary adjustments for future increases.
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