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Exit fees for home care clients top $4,000, data shows

New information published on My Aged Care has revealed huge market variation in the maximum exit fees clients can expect to pay when they leave their home care service.

From 27 February, home care providers have been required by legislation to publish their maximum exit charges on the government’s My Aged Care website, making this information publicly available for the first time.

An analysis by Community Care Review shows that maximum exit fees range from $0 to $4,153, which is equivalent to almost 9 per cent of the annual subsidy for a Level 4 home care package and nearly 10 times the industry average.

The maximum exit fee of $4,153 is from the Royal Freemasons Home Care in Victoria.

The Department of Health told a senate estimates hearing this month the average maximum exit fee was $417.

Other providers with maximum exit fees well above the industry average are St Simeon Community Services in Sydney, which has a published maximum exit amount of $2,015, and IRT and Mercy Community Services, which have each set maximum fees of $1,000.

The Royal Freemasons told CCR its maximum exit fee applied to a Level 4 package and was reflective of the administration costs involved in reconciling and transferring a client’s unspent funds. The provider said its minimum exit fee was $340 and average fee was $1,840.

A spokesperson from Royal Freemasons said the process for transferring unspent funds “takes considerable time” including notifying all services involved in the person’s care and preparing handover documentation if the client is moving into residential care.

“We cannot comment on the fees of other providers, other than to say if what has been put forward is accurate, we are surprised they have calculated the discharge process to be such a low cost,” the spokesperson said.

IRT told CCR that its fees and charges reflected the services provided.

CCR sought comment from St Simeon Community Services about its exit fee and is awaiting a response.

Not expecting ‘huge turnover’

Ian Yates, chief executive of COTA Australia, said exit fees should reflect the actual costs of transferring a client’s unspent funds and he noted a significant number of providers were not charging any exit fees.

CCR’s analysis shows home care providers that have decided not to charge an exit fee include RDNS, KinCare, Benetas, Uniting Home Care, Silver Chain, ECH, Catholic Healthcare, Feros, Ballycara, Centacare and ACH Group.

“This means that they don’t expect huge turnover and are absorbing the administration costs in the normal costs of doing business,” said Mr Yates.

He confirmed that COTA Australia had received a small number of complaints from consumers and families about pressure tactics from providers to sign a home care agreement including an exit fee that a consumer did not agree with, without an opportunity for negotiation.

He said those complaints had been referred to the Aged Care Complaints Commissioner and the experience of consumers would be monitored.

An exit fee must be agreed to with a client as part of their home care agreement and cannot be higher than the amount published on My Aged Care. An exit amount can’t exceed a person’s unspent funds.

Related CCR coverage: Concerning start to ‘enhanced’ consumer information on My Aged Care 

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10 Responses to Exit fees for home care clients top $4,000, data shows

  1. Dave March 16, 2017 at 4:08 pm #

    Excellent Report!

    Named and Shamed!

  2. Ted Wards March 17, 2017 at 9:47 am #

    What people need to understand that if there is no exit fee in their client agreement or contract, the organisation cannot charge an exit fee. Me thinks this is to ensure that the maximum amount of money can stay with the organisation, leaving clients with very little. The aged care industry is now primarily a for profit business and its all about competition. If someone doesn’t understand that, then they need to. I’ve worked in the home care industry for 30 years and I have seen it turn right around. Big business just doesn’t care.

  3. Dave March 17, 2017 at 11:52 am #

    Well Ted, I do understand why that can seem to be the case. Sure. But can I make a couple of observations?

    The examples of high Exit Fees listed in the article are all from so called “Not For Profit” providers: Freemasons, St Simeons, IRT, Mercy….

    So this does not seem to be driven by “For Profit” providers.

    And you are dead right when you say: “this is to ensure that the maximum amount of money can stay with the organisation, leaving clients with very little.”

    The Not For profit providers are doing this because in the past – before 27 February – they did not have to charge an “Exit Fee.” if a Client left them, the provider was able to keep every cent of the “unspent funds.” The whole lot!

    A $4,000 “Exit Fee” is usury. But – horrible though it is – even $4,000 is better than “we’ll take the lot, thanks!” – which is what used to happen. “Unspent Funds” of over $10,000 have been relatively common. Prior to 27 Feb, that’s what the Provider got to keep!

    Encouraging Clients to reserve some “unspent funds” is certainly sensible – but the old system definitely had a perverse incentive for providers to encourage accumulation of very large “unspent funds.” In effect, the Provider got to “inherit” the money!

    So yes – the “Exit Fee” is an attempt to claw back money they have grown to regard as “theirs.” But I don’t see that as a product of competition. It’s actually a hangover of an even worse system where Providers felt they owned the whole thing.

    Hopefully – and I’m an optimist – competition will see these ridiculous “Exit Fees” disappear over time. It’s good to see many providers refusing the temptation. Over time, Clients will choose providers with a zero exit fee, and the organisations who are charging one will be forced to follow suit.

    The key issue then will be quality of service provision and genuine Client Directed Care (I refuse to use the term “Consumer.”)

    Oh – and value too. Taking 33% of the Package, or often more, for Admin and Case Management fees – that is also part of the old system. The result – less actual Home Care for the Client, and often with pretty ordinary Case Management and Admin anyway.

    Will competition fix that without compromising quality? You know – I think it will. If a Client is not happy with the Case Management or quality of care, they can choose a new provider. And they should!

  4. Anonymous March 17, 2017 at 4:53 pm #

    I would be interested to see the notice period for those charging no exit fee as many are hiding their exit fee by enforcing a notice period

  5. Sue March 17, 2017 at 7:05 pm #

    But please do factor in the number of providers with zero exit fees who are enforcing lengthy notice periods before a client can actually exit the package. I’m sure many of these providers would collect for themselves more than the average $400 over that time.

    Didn’t see that covered in the article and it needs to be factored in when looking at the big picture.

  6. Liana March 20, 2017 at 7:45 am #

    I think that it should be considered the notice period that those with no exit fee are enforcing on their clients.

    Many of those who have advertised ‘no exit fee’ are enforcing a notice period of 4-6 weeks therefore getting their exit fee this way which is not being advertised or mentioned in articles above

  7. Dave March 23, 2017 at 11:55 am #

    I won’t mention the Private Provider I am connected to, because this is not a forum to advertise. However, I can assure you that we have no exit fee whatsoever and our Home Care Agreement can be terminated at 24 hours notice.

    I have seen quite a few Home Care Agreements from the NFP Sector – 2 weeks notice and above is common. I am aware of a major NFP which is now Charging an Exit Fee of more than $900 AND requesting Clients to sign a Home Care Agreement with an 8 week notice period. So they are happy getting it both ways.

    There is simply no justification for the Exit Fees that are being charged, and the Public will realise this quite soon. Alzheimers Australia was entirely correct in calling for the Department to enforce a limit on Exit Fees.

  8. Sharon Scarlett April 2, 2017 at 7:33 am #

    So in effect if a provider is charging $4000 for an exit that is $4000 they (provider) would ensure is unspent. The purpose of HCP is to keep consumers at home, $4000 can go a long way as far as providing additional supports and services.
    Tsk, tsk to the providers charging ridiculous amounts, not a good look for your organisational values!

  9. Rob April 15, 2017 at 11:23 am #

    I’ve left my provider of HCP, not because of any exit fee or any other charge.

    I left because the service provided was so appalling that my son arrive at my home, the afternoon of the day my home was “supposedly” cleaned and asked why my home was so dirty.

    The floor had not been vacuumed, despite them being here for over an hour an a half. The bathroom mirror had dirty streaks. I knew that the workers hadn’t done a good job, but I am a bit sight impaired, which they knew, so just did a rough enough job.

    Home care is not for me any more. I’ve tried two different agencies now, and each is just as bad as the other.

    It may take me longer, but I do know that my house is clean.

  10. Thanks Linda for a great article which has prompted good community discussion that one hopes the Government and its advisers’ monitor.

    I can speak with authority on the topic of Government Funded Home Care Package Fees because I have audited HUNDREDS of Home Care Packages Monthly Statements and Budgets from all around Australia for older people, for free, over the last two years and still audit new Home Carte Packages every week.

    Ted Wards is right on one point alone and wrong on every other point.

    Right that aged care is big business and wrong to think that this is a new change brought about by CDC or the entry of nasty For-Profit Companies.

    Dave is 100% right. In the “bad old days” Not For Profits were keeping higher percentages of the Government Funding than they now keep and until 27 Feb 2017 they kept 100% of the unspent money and worse still they had a VESTED FINANCIAL INTEREST TO DENY SERVICES TO older people, that their packages could afford to pay for, in order to maximise the client’s unspent fees.

    I have seen hundreds of packages with high unspent funds. I have seen Not For Profits content to deny additional care to their clients so they could keep running high unspent balances.

    ****The worst was a client whose Not For Profit Provider had $23,500!!!!!!!!!!!!!!! of UNSPENT FUNDS and happily told the client they couldn’t have more services and therefore had to buy additional care privately. **** Disgusting.

    I have seen unspent funds of $8K to $10K a pop commonly kept by Not For Profits when a client died or moved to a Nursing Home.

    CDC reforms and increased competition will sort this market out AS ELDERS BECOME EDUCATED and INFORMED.

    Financial transparency brought by CDC has enabled Elders and their advocates to SEE what has actually been happening all these years i.e. the high fees charged as the Dinosaurs carry on with their “business as usual ways”.

    I have read MANY, many Home Care Agreements I do not agree Providers are getting their exit fees by having longer exit notices. Some of the highest exit fees I have seen – had the LONGEST notice requirements – ie they benefit both ways.

    Clients will move to where they receive the best service for the best value. None of us will be the best value for every client and we can continue to work together to the benefit of all clients. The Not For Profit versus For Profit is offensive nonsense (and I am a Director of Not For Profit Registered Charity), what matters is the client…not us…it’s the client…the client, the client. The sooner we understand this – the sooner the competition will heat up with better solutions for the client.

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