Wealthy Aussies called to contribute more to aged care costs

Mar 12, 2024
Prime Minister Anthony Albanese rejected the notion that encouraging wealthier individuals to fund their retirement would penalise those who have worked harder. Source: Lukas Coch/AAP PHOTOS.

In a significant stride toward fortifying Australia’s aged care system for present and future needs, the Federal Government has unveiled the findings of the Aged Care Taskforce’s Final Report.

Spearheaded by Minister for Aged Care Anika Wells, the Taskforce, comprising representatives from older Australians, aged care providers, and experts, aimed to address the pivotal query raised by the Royal Commission: how to sustainably fund aged care into the future.

The Report presents 23 recommendations aimed at enhancing the longevity and resilience of the aged care sector.

Contrary to advocating for a new tax or levy dedicated to funding aged care, the Taskforce is calling on wealthier individuals to contribute more significantly to aged care expenses. This strategic approach seeks to alleviate financial burdens on the government, thereby facilitating access to residential and in-home services for older individuals with more modest means.

The anticipated rise in wealth among older Australians, coupled with a projected 15-percentage-point decline in those over 65 relying on the aged pension or income support by the early 2060s, underscores the need for proactive measures. As superannuation and assets play a growing role, the proportion of full pension recipients is expected to decrease, although challenges persist for retired Australians without substantial means, especially those who do not own homes.

Currently, the government shoulders approximately 75 per cent of residential aged care costs and 95 per cent of home care expenses. However, the sustainability of this support is under strain as the working-age population diminishes, and the number of older Australians, many of whom are not income tax contributors, rises.

In response to these challenges, the Aged Care Task Force, commissioned by the government, recommends a strategic shift – urging those with more substantial savings to shoulder a greater share of their later life care costs. This shift, it argues, will not only secure a more equitable distribution of financial responsibility but also relieve the strain on the federal budget.

Mike Baird, former NSW Premier and task force member, underscored the importance of reforms to ensure the long-term viability of the aged care system

“There are constraints and demands across all parts of budget,” he said.

“Asking those who have the means to contribute more is a logical step and having a safety net for those that don’t have the resources also provides some protection, so it’s a good balance.”

Prime Minister Anthony Albanese rejected the notion that encouraging wealthier individuals to fund their retirement would penalise those who have worked harder, emphasising the importance of ensuring a sustainable system for the future.

“This isn’t about any negative aspect, this is about making sure that we have a system that’s sustainable into the future,” he told ABC radio.

“We’ll consider the recommendations, we know that it is a difficult time for people when you have a loved one who requires care who’s unable to continue to live at home.”

Welcoming the Taskforce’s recommendations, Tom Symondson, CEO of the Aged and Community Care Providers Association, stressed the urgency of implementing these suggestions while underscoring the impracticality of persisting with makeshift solutions while the aged care system faces impending challenges,.

“Aged care in Australia cannot continue to muddle along with Band-Aid solutions while the system crumbles,” he said.

“Every Australian should have access to high quality aged care, regardless of their location, income or financial means.”

-with AAP.

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