The aged care funding disaster ought to pressure Australians to put aside a few of their superannuation financial savings with a view to enhance requirements in aged care, a brand new blueprint from the sector’s peak advocacy group has cautioned.
Released on the Aged and Community Care Providers Association’s (ACCPA) nationwide summit on Thursday, the brand new points paper additionally canvassed a brand new social insurance coverage scheme or Medicare-style levy as options to assist fill the aged care funding blackhole.
The intervention comes after harrowing particulars of neglect of aged Australians got here to gentle on the 2021 aged care royal fee. Systemic issues dealing with the sector included insufficient funding, a problem that shall be additional compounded as Australia’s inhabitants continues to age.
In the May federal finances, aged care prices for the 2022-23 monetary yr had been revealed to have blown out from $24.8bn to $29.6bn, largely because of elevated funding following the royal fee’s suggestions.
Funding for the sector is ready to surge to virtually $40bn by fiscal yr 2026-27, with an extra $11.3bn to fund a 15 per cent pay rise for the sector over the subsequent 4 years.
Federal aged care funding solely equates to 1.2 per cent of GDP, nicely beneath the OECD common of two.5 per cent.
While the federal authorities will proceed to contribute the lion’s share of funding, the nation’s $3.5 trillion superannuation system has been submitted as one potential resolution to the funding disaster. The ACCPA paper proposes {that a} proportion of individuals‘s superannuation savings should be set aside to pay for aged care costs.
“The superannuation system is designed to provide an income during retirement, enabling people to remain financially independent as they age,” ACCPA chief executive officer Tom Symondson said.
The paper notes that superannuation savings are being passed on as inheritance rather than paying for aged care services.
“We want to see a system that encourages the use of superannuation as it was intended,” Mr Symondson said.
In 2021, the Productivity Commission released a research paper that estimated that $3.5 trillion in assets would likely change hands in Australia by the middle of the century. Australia’s superannuation system shall be an important part of this wealth switch.
Speaking on tv on Thursday morning, Assistant Treasurer Stephen Jones was sympathetic to the proposal, claiming that the nation’s superannuation scheme was supposed for retirement, not as a car for inheritance.
“It strikes me as odd in a system which is about retirement income that a third of the cheques written by superannuation fund, by value, are bequests,” he instructed ABC News Breakfast.
“It’s not the purpose of superannuation to have a tax preferred, state planning mechanism. It’s for providing for people in their retirement.
“We’ve got a crisis of funding in aged care. At the same time, we have one third of the value of funds being written out in requests. That doesn’t square. It’s a conversation that we need to have.”
The federal authorities has convened an aged care taskforce, which is ready to ship suggestions in December this yr.
“The government is committed to an aged care system that is fair and equitable both for older people who contribute to the cost of their care and for younger people who support aged care through their taxes,” a authorities spokeswoman mentioned.
Source: www.perthnow.com.au
