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Charging exit fees from 27 February 2017

13 Jul 2016

The Department of Health recently released exposure drafts of legislation proposed to give effect to home care reforms from February 2017.

The reforms will see home care package funding following the consumer, giving home care recipients greater freedom of choice and movement.

After 27 February 2017, providers will be able to deduct an exit fee from the consumer’s unspent home care amount when they cease providing home care to a consumer. The draft legislation suggests there will be a number of restrictions around the deduction of exit fees:

  • The amount of the exit fee must be clearly set out in the consumer’s home care agreement. Home care agreements for existing consumers can be varied to specify the exit fee amount that will be payable after 27 February 2017, however this is subject to the consumer agreeing to the change.
  • Providers are required to notify the Department of Health of the maximum exit fee that may be deducted from a consumer’s unspent home care amount and it must also be published on the My Aged Care website.
  • The exit fee deducted must not be more than the consumer’s unspent home care amount to ensure the consumer is not left with a debt.
  • Within 56 days after ending the home care agreement, the provider must give the consumer notice of their unspent home care amount including the amount of any exit fee and the proportion of the unspent home amount that will be returned to the Commonwealth and the consumer depending on their respective contributions to the home care funds.  

The consultation period for the draft legislation has now closed and final versions are expected to be tabled in Parliament soon. As the changes draw closer Hynes Legal will release amended home care agreements via Simply Legal to active subscribers as well as providing further guidance and to providers who propose to charge