A study has found that the pension should be used to fund retirees’ aged care to reduce pressure on the Commonwealth’s coffers as the government rules out imposing a new tax to keep the sector afloat.
It is expected that older people will be wealthier in retirement than their predecessors, largely as a result of the pension system.
The superannuation should be used to cover healthcare and aged care costs as the aim of the scheme is to help Australians save for retirement, the government-commissioned Aged Care Task Force report has found.
The share of people over 65 who use an old-age pension or other income support is expected to decline by 15 percentage points by the beginning of 2060.
Fewer people will receive the full pension rate due to increased pensions and assets.
According to the government-commissioned Aged Care Task Force report, the superannuation should be used to cover the costs of healthcare and aged care, as the aim of the scheme is to help Australians save for retirement.
“Over the next twenty years, the number of people with a pension balance at age 85 will grow significantly, with a greater proportion of people having significant financial resources,” the report said.
A levy or tax to finance the aged care system was not recommended and has been ruled out by the government.
Prime Minister Anthony Albanese denied that getting boomers to fund their retirements would punish people who worked harder, saying this would help make the system sustainable.
“This is not about any negative aspect, this 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 if you have a loved one who needs care and can no longer live at home.’
The report also called for the Commonwealth to continue to play a major role in financing aged care.
A strong safety net was also recommended for those with few resources to cover costs.
The report also shows that older people are expected to be wealthier in retirement than their predecessors, largely as a result of the pension system.
Catholic Health Australia called on the government to quickly implement the report’s recommendations.
“With most aged care providers operating at a loss, these sensible and responsible reforms are urgently needed so they can continue to invest and deliver quality care to all Australians,” said CEO Jason Kara.
‘The fairest way to make extra money is to ask people who can afford it to contribute more towards their housing and living costs, costs they have covered throughout their adult lives.’
Ambitious action was needed to tackle an aging population and the increasing complexity of aged care needs, the Council on the Aging Australia said.
“The conversation about the long-term financial sustainability of aged care is critical and we cannot afford to shy away from it,” said CEO Patricia Sparrow.
The task force, chaired by Minister Anika Wells, has made 23 recommendations that are being considered by the government.