Wealthy older Australians to pay more for aged care under taskforce recommendations - 9News

Australians won't be hit by a new tax or levy to cover the rising costs of aged care, but wealthy people who use the service could end up paying more for it than their less well-off counterparts.

The federal government released the final report from the aged care taskforce today, which contained 23 recommendations to make the system fairer and more sustainable.

One of those recommendations was that the cost of aged care be adjusted based on residents' wealth, meaning people who are well-off would pay more than those who are less wealthy.

Wealthy people in aged care could end up paying more for it than their less well-off counterparts. (Danielle Smith)

"Given the increasing wealth of many older people and the declining working age (that is tax paying) population, there is a strong case to increase participant co‑contributions for those with the means to contribute, noting that there will always be a group of participants who need more government support," the final report states.

While the report said the aged care system isn't in the financial position to meet the increasing demand that an ageing population will put on it, it didn't recommend implementing a new tax or levy to fund the scheme.

The final report from the aged care royal commission, released in 2021, did call for a new tax, but the taskforce said it would add to intergenerational tax inequity.

"While the taskforce supports government maintaining its central role in funding aged care, it does not support a specific increase to tax rates to fund future rises to aged care funding," it wrote.

"There are substantial intergenerational equity issues in asking the working age population, which is becoming proportionally smaller to pay for these services.

"Moreover, superannuation has been designed to support people to grow their wealth and fund the costs associated with retirement including aged care."

Minister for Aged Care Anika Wells said the government would continue to analyse the report before making a formal response to the recommendations. (Alex Ellinghausen/SMH)

The government has not yet committed to adopting the recommendations but said it won't introduce a tax or the "means testing treatment of the family home".

"Australia's aged care system is under stress," Aged Care Minister Anika Wells said.

"There is universal acceptance that something must change in order to ensure all Australians can age with the dignity, safety and high-quality care they deserve.

"After spending their lives building up our country, we have a solemn responsibility as a nation to respectfully care for older Australians as they age.

"All of us have a stake in a sustainable, high-quality and dignified aged care sector – whether it's for our parents, ageing loved ones, or even eventually for ourselves."

She said the government would continue to analyse the report before making a formal response to the recommendations.

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2024-03-12 06:37:15Z
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