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Superannuation should be used to fund pensioners’ aged care to take the pressure off the Commonwealth’s coffers, an audit has found, as the Government rules out imposing a new tax to support the sector.
Older people are expected to be richer in retirement than their predecessors, largely because of the pension system.
Pensions should be drawn on to cover health and aged care costs as the purpose of the scheme is to help Australians save for retirement, the government-commissioned Aged Care Task Force report found.
The proportion of people aged over 65 accessing old-age pensions or other income support is expected to fall by 15 percentage points in the early 2060s.
Fewer will receive the full pension rate due to increased pension and wealth as well.
According to the government-commissioned Aged Care Task Force report, superannuation should be used to cover health and aged care costs, as the purpose of the scheme is to help Australians save for retirement
“Over the next 20 years, the number of people with post-retirement balances at age 85 will grow significantly, with a greater proportion of people having significant funds available,” the report said.
A levy or tax to fund the aged care system was not recommended and has been ruled out by the government.
Prime Minister Anthony Albanese denied making boomers fund their retirement would penalize people who worked harder as it would help make the system sustainable.
“This is not about any negative aspect, it is about making sure we have a system that is sustainable into the future,” he told ABC radio on Tuesday.
‘We will consider the recommendations, we know it is a difficult time for people when you have a loved one who needs care and is unable to continue living at home.’
The report also called for the Commonwealth to continue to play a significant role in the funding of aged care.
A strong safety net for people with low means to cover costs was also recommended.
The report also found that older people are expected to be richer in retirement than their predecessors, largely because of the pension system
Catholic Health Australia called on the government to quickly implement the report’s recommendations.
“With most aged care providers running at a loss, these sensible and responsible reforms are urgently needed so they can continue to invest and deliver quality care to all Australians,” CEO Jason Kara said.
‘The fairest way to provide extra funding is to ask people who can afford it to contribute more to their housing and living costs, costs they have covered during their adult lives.’
Ambitious action was required to tackle an aging population and increased complexity of aged care needs, the Council on the Aging Australia said.
“The conversation about the long-term financial sustainability of aged care is a crucial one, and one that we cannot afford to shy away from,” said Executive Director Patricia Sparrow.
The taskforce, led by minister Anika Wells, made 23 recommendations which are being considered by the government.