What is the Income-Tested Care Fee for home care, and how is it calculated?
Financials, Fees & Funding
Fees & Contributions
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In short...
The Income-Tested Care Fee was part of the former Home Care Package system. New Support at Home participants instead pay service contributions based on income and assets and the type of service received. Protected 'no worse off' arrangements apply to some people approved for HCP by 12 September 2024.
The details...
What is the Income-Tested Care Fee for home care, and how is it calculated?
The Income-Tested Care Fee was an additional contribution that some people paid towards the cost of a Home Care Package.
It applied under the former Home Care Packages Program, which was replaced by Support at Home on 1 November 2025.
Under Support at Home, new participants do not pay a separate Income-Tested Care Fee. Instead, they pay a percentage of the price of certain services when those services are delivered.
Who paid the Income-Tested Care Fee?
Under the former Home Care Packages system, Services Australia assessed a person’s income to determine whether they could afford to contribute towards their care.
A full-rate pensioner would generally not pay an Income-Tested Care Fee.
A part pensioner or self-funded retiree could be required to pay the fee if their assessable income exceeded the applicable income-free threshold.
The assessment considered income such as:
Age Pension or other government payments
employment or business income
superannuation income streams
rental income
financial investments
deemed income from financial assets
some overseas income.
Unlike residential aged care means testing, the Home Care Package Income-Tested Care Fee was based primarily on income rather than the full value of the person’s assets.
How was it calculated?
Services Australia calculated a daily fee based on the person’s assessable income.
Broadly:
An income-free threshold applied.
Income above that threshold was assessed.
Services Australia calculated a daily Income-Tested Care Fee.
Daily, annual and lifetime caps limited the total amount payable.
Services Australia advised both the participant and provider of the assessed fee.
The fee could be charged each day the person received a Home Care Package, even if they did not receive a service on that particular day.
The amount was therefore not directly linked to the number of cleaning, personal-care or nursing visits received during that week.
What were the former maximum amounts?
Immediately before Home Care Packages ended on 1 November 2025, the maximum daily fee depended on the person’s income band.
From 20 September 2025:
people in the lower income-tested band could pay up to $19.36 per day
people in the higher income-tested band could pay up to $38.72 per day.
The corresponding annual caps were:
$7,047.55 for the lower band
$14,095.20 for the higher band.
A lifetime cap of $84,571.66 also applied at that time. These amounts were indexed periodically.
These were maximum amounts. The actual fee depended on the individual income assessment and could be lower.
Did paying the fee increase the care budget?
Yes.
The Income-Tested Care Fee was the participant’s contribution towards the cost of their Home Care Package. It was added to the government subsidy available to pay for approved care and services.
For example, if someone had a government package subsidy and was assessed to pay an Income-Tested Care Fee, both amounts contributed towards the total care budget.
It was not simply an administration charge kept outside the package.
What replaced it under Support at Home?
Support at Home uses service-based participant contributions.
Instead of paying one assessed daily fee regardless of service use, the participant generally contributes a percentage of the agreed price each time an eligible service is delivered.
The contribution depends on:
the person’s income and assets
pension or Commonwealth Seniors Health Card status
the type of service received
the agreed provider price.
The categories are:
Clinical supports
Approved services such as nursing and physiotherapy have a 0% participant contribution.
Independence services
Services such as transport, respite and social support may attract a moderate contribution.
Everyday living services
Services such as cleaning, gardening and meal preparation attract the highest contribution rates.
Services Australia completes the income and assets assessment and tells the participant and provider which percentages apply.
Practical comparison
Under the old Home Care Package system, a person might have been assessed to pay an Income-Tested Care Fee of $10 per day.
That could mean paying approximately:
$70 per week
$300 per month
whether they received several services that week or very few.
Under Support at Home, the same person instead pays a contribution only when a contributable service is delivered.
For example, if their assessed everyday-living contribution rate is 30% and cleaning costs $110:
participant pays $33
government funding pays $77.
If they receive no contributable service that week, there is no service contribution for that week.
What happens to people who previously paid an Income-Tested Care Fee?
People who were receiving or approved for a Home Care Package on or before 12 September 2024 are protected by the no-worse-off principle.
This means:
if they had been assessed as paying an Income-Tested Care Fee, their Support at Home contributions should be the same or lower
if they had been assessed as paying no Income-Tested Care Fee, they will not be asked to pay Support at Home service contributions.
Previous Income-Tested Care Fees also count towards the applicable lifetime contribution cap.
Do I still need a financial assessment?
Yes.
Although the old Income-Tested Care Fee has ended, Services Australia may still need financial information to calculate Support at Home contribution percentages.
People receiving certain income-support payments may not need to complete a separate form because Services Australia may already hold the required information.
Other people may need to complete the Support at Home Calculation of Your Cost of Care form, known as form SA456.
The practical distinction is:
The Income-Tested Care Fee was a daily fee under the former Home Care Packages system. Support at Home replaced it with contributions calculated as a percentage of each independence or everyday-living service actually received.
What should I do next?
Complete the Services Australia assessment and ask for confirmation of whether standard or protected contribution rules apply to you.
Helpful Local Home Help resources
Takeaways
- The Income-Tested Care Fee is legacy HCP terminology.
- Current contributions depend on means and service type.
- No-worse-off protections may apply.
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About the Author
Local Home Help Editorial Team
This article was created by Local Home Help to help Australian families better understand aged care and home support options in plain English.
Our content is based on publicly available information from:
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My Aged Care
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Department of Health, Disability and Ageing
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Aged Care Quality and Safety Commission
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Provider pricing schedules and operational experience within the aged care sector.
Local Home Help is an independent consumer information platform and does not provide medical, legal or financial advice.
Important information
Aged care rules, fees, eligibility requirements and program arrangements can change. The information on this page is general guidance only and may not apply to every person or situation.
Before making a financial, legal or care decision, check the latest information with My Aged Care, Services Australia, the Department of Health, Disability and Ageing, or another appropriate official source.
Local Home Help does not provide legal, financial, medical or clinical advice.
Source data
Last reviewed
20/7/26, 9:08 pm