Higher taxation, aged care levy, or a social insurance scheme are the three ways ACCPA members see Aussies funding our aged care system.
© Danielle Robertson Consulting Pty Ltd t/as DR Care Solutions
Discussion on how Australia will fund its aged care system heightens as the Aged Care Taskforce[1], formed by the Australian Government in June 2023, works on its solution. The solution is to be delivered in December 2023, and a progress report in October 2023[2].
Aged care sector commentary hit the airwaves in early August as 43 members of the Aged and Community Care Providers Association (ACCPA) submitted their views to the Taskforce in an Issues Paper[3] drafted after their Financial Sustainability Summit held in Canberra in June.
The paper says that those with the means should be asked to pay, or partly pay, for those expenses they have paid for their entire lives - namely their accommodation and lifestyle expenses.
ACCPA CEO Tom Symondson points out: “The superannuation system is designed to provide an income during retirement, enabling people to remain financially independent as they age. We want to see a system that encourages use of superannuation as it was intended.”
The paper notes that large numbers of older Australians have the financial means to contribute to the cost of the services they need.
It quotes:
The Federal Government’s 2020 Retirement Income Review Report finding that “most people die with the bulk of the wealth they had at retirement intact”[4], and
Productivity Commission research that, over the past 20 years, almost $1.4 trillion has been gifted by Australians in inheritances after they die[5].
The paper concludes that older Australians are potentially denying themselves the care they need, in order to pass on an inheritance – while recent research shows that almost three quarters of Australians are willing to forego a portion of their own inheritance so their parents and grandparents can enjoy the retirement they deserve.
ACCPA members do not rule out other sources of funding. While wealthier individuals are to be asked to contribute more to their own care, the lack of funding in aged care is such that we still need to consider higher taxes, a dedicated levy, or a new social insurance scheme for future generations.
We’ll keep you informed of proposed funding solutions when the Aged Care Taskforce releases its interim report in October 2023.
Need help caring for a loved one? Please feel free to call me, Danielle Robertson, at any time for an initial discussion on how to set up the right care, support and assistance at the right time and in the right place.
[1] DR Care Solutions: Evidence Of An Aged Care Levy On Australian Taxpayers Mounts
[2] Australian Government Department of Health and Aged Care: Aged Care Taskforce
[3] ACCPA: Financial Sustainability Summit Issues Paper August 2023
[4] Australian Government The Treasury: Retirement Income Review Final Report, July 2020, p.23
[5] Australian Government Productivity Commission: Wealth Transfers And Their Economic Effects - Research Paper, November 2021, p.36