The Government is looking to reduce the estimated $700 million in unspent home care funds by moving providers to payments in arrears for services once they are delivered.

It is bad timing for providers. At last year’s Royal Commission workforce hearing in October, KinCare CEO Jason Howie (pictured above left with Benetas CEO Sandra Hills) said the changes would “have the effect of stripping four to six months’ worth of funding out of the industry over the course of the next two years”.

Currently, providers received payments in advance of the month – under the Improved Home Care Payment Administration No. 1 Bill 2020, the full payment of the monthly subsidy will instead be made after the providers lodge their monthly claim.

The change is to address concerns over unspent funds and bring home care arrangements into line with other Government programs, such as the National Disability Insurance Scheme.

This first phase will see home care providers will receive their final advance payment at the start of May 2020 – just two months away – with no advance payment for June 2020.

Providers will only be able to claim for June after 30 June 2020.

A second phase will see payments being made both in arrears and based on actual services provided to each care recipient, but there is no date yet for its implementation.

The original timetable for the changes originally had April 2021 as the completion date however – just over 12 months away.

Other Providers have estimated the move will pull at least $200 million from overall cash flow – what impact will this have on providers already struggling to remain financially viable?