Aged home care package changes set off cash conflict between providers and suppliers
Kevin and Sue Dawson are happy with government moves to help older Australians stay at home longer. (ABC News: Scott Jewell.)
In short:
Some providers of home care for senior Australians are trying to coerce kickbacks from suppliers of services and equipment, including mobility aids.
The ABC has emails that show providers, who manage clients' cash, seeking "monetary return" and fees for sending business to suppliers.
What's next?
Government funding for aged care at home has ballooned to $8.8 billion a year, with almost half going to the 25 biggest care providers, which continue to grow.
For the past 15 years, Kevin and Sue Dawson have called a neat little cottage home.
Nestled next to the Loddon River, just west of Maldon in central Victoria, the idyllic township of Baringhup is where they have settled and where they are determined to stay.
The senior citizens' ability to maintain their lifestyle is largely thanks to the federal government's Home Care Package program.
The couple uses aged-care funding for mobility aids and other support.
The Dawsons just want to care for each other at home. (ABC News: Scott Jewell)
Without it, Mr Dawson said, "we'd probably be in a situation where we'd have to go into aged care or maybe hospital".
"Staying at home is paramount from the point of view of being able to care for one another and live a normal life,"he said.
A month ago, the federal government's Aged Care Act came into effect to help older Australians remain at home for longer.
The changes, including a massive lift in government funding, are designed to improve the scheme's efficiency and sustainability as Australia's population ages.
But they have not been universally welcomed, with many recipients, including the Dawsons, complaining of higher costs and increased contributions.
Despite their reservations and higher contributions, the Dawsons, especially Ms Dawson, are happy with what the scheme provides.
"We're very fortunate to have the equipment that we've got … mobility chairs and I've got trolleys in the kitchen to help carry food — a lot of things to make my day a lot easier."
But a fight is brewing between the organisations that manage client funds — the providers — and the firms that provide the services — the suppliers — particularly those that specialise in wheelchairs and home modifications.
Care providers, which manage client funds, are increasingly at odds with the suppliers of equipment, including wheelchairs. (Supplied: Adobe Stock )
Providers pressured to provide kickbacks
The new Support at Home program, which on November 1 replaced Home Care Packages, reduces management fees providers can charge users.
But suppliers say providers are trying to recoup lost fees by other means.
Industry body Assistive Technology Suppliers Australia reports some home care providers are trying to strongarm suppliers into "pay for service" arrangements.
"My industry — the suppliers, the manufacturers and distributors of assistive technology — are being pressed by a number of service providers — people that hold the individual's funds — to provide kickbacks, incentives and commissions," the lobby group's chief executive officer, Serena Ovens, said.
Serena Ovens says some home care providers are trying to force equipment suppliers to provide kickbacks and commissions. (ABC News: John Gunn)
Those who refuse can find themselves blacklisted or no longer included on an "exclusive list".
"If they choose not to offer a commission or an incentive to the service provider, they may not be [asked] to provide the equipment," she said.
"It's borderline illegal."
More government cash but tighter fees
The sudden grab for cash from Home Care Package providers coincides with a dramatic drop in revenue.
As part of the aged-care overhaul, providers have had fee commissions slashed.
Previously, they were taking up to 30 per cent of a recipient's funds; now they can charge a maximum of 10 per cent, and some are trying to recoup those funds the best way they can.
The ABC has obtained emails with direct requests for rebates and payments, which suppliers have argued eat into already slim profit margins.
One email states:
"We are looking for preferred suppliers of equipment for our clients with an arrangement in place to have some monetary return for sending the business to the preferred supplier."
"To help recover package management losses, I propose we offer a flat fee structure," another email reads.
The home care industry is now worth more than $8.8 billion. (Supplied: Pexels/Kampus Production)
Home care funding balloons nearly 30pc in a year
Home care is big business.
KPMG compiles an annual report into the sector, and co-author Lauren Ffrost has tracked the massive lift in government spending.
Between the 2023 and 2024 financial years, government funding for home care packages increased 29.2 per cent.
"Government expenditure over the last few years has certainly increased, particularly into the support-at-home market, where we're seeing about $8.8 billion or so," Ms Ffrost said.
A staggering number of organisations and firms manage that money for elderly Australians.
Lauren Ffrost. (ABC News: Scott Gillette)
According to Ms Ffrost, 855 home care providers now handle clients' cash, a slight decrease on the previous year, with further rationalisation likely.
She said the biggest 25 providers — a mix of not-for-profit groups, corporate outfits and government entities — soaked up almost half the government expenditure and were getting bigger.
"We're seeing larger providers growing," she said.
"We're also seeing the market grow naturally, just through the level of investment into the sector."
Loading...Practice outlawed in other programs
Signs of stress are appearing among home package providers.
In recent weeks, two have gone to the wall, one with thousands of employees and operations across four states.
Melbourne-based Annecto, a charity with 4,400 clients, many in rural areas, collapsed in July with debts of almost $20 million, while a Sydney-based charity failed a fortnight ago.
Equipment suppliers have been caught in the collapses and are likely to find themselves out of pocket, another reason many are loath to hook up with individual home package providers on exclusive arrangements.
Most would prefer to continue dealing with individual clients.
Ms Ovens said providers pursuing kickbacks undermined a fundamental principle of the new legislation — the individual's right to choose.
And she said backhand deals were explicitly banned from other government-run programs.
"The NDIS states that you cannot offer commissions, kickbacks. They're also concerned about conflicts of interest," she said.
"It's really important that if someone has an arrangement with another provider, that that conflict of interest is declared up-front to the individual and they can then decide."
The ABC's questions to the major service providers went unanswered, while the federal government noted the concerns but made no response.