Sunrise presenter Nat Barr has questioned Labor Minister Jason Clare about a bold proposal to set aside part of someone’s pension for their future aged care costs.
In June, Aged Care Secretary Anika Wells announced that a task force would be created to advise the federal government on how to allocate more money for aged care.
Assistant Treasurer Stephen Jones said Thursday the task force would consider a range of funding options, but that the nation should look at the possibility that some people may be forced to “foreclose” on part of their retirement to fund their care.
On Friday morning, Barr confronted Mr Clare about whether this proposal would be seriously considered by the government as a viable option.
“So you’d consider using a portion of someone’s super to pay for elder care costs?” she said.
“Well, this is an independent investigation,” the education minister replied.
“I do the exact same thing with universities – appoint a bunch of experts, give us some advice, they report by the end of the year.”
“And we’ll see what ideas they come up with and see if they’re good, bad, or indifferent.”
The pair agreed on the abysmal state of aged care in Australia, which was exposed in the damning Royal Commission into the system.
“Half of the aged care centers can’t even afford it, but is that something you look at and think, ‘That’s a good idea’?” asked Barr regarding the Superannuation solution.
Mr Clare said he “did not want to interfere” with the independent review process.
“The whole point of an independent review is not for politicians to say what they like and what they don’t like, but to get expert advice, get feedback from the community, and then politicians can look at it at the end of the year. ‘ he said.
The education minister (pictured) said an independent review of Australia’s aged care system was underway and he would not interfere in that process
The Aged and Community Care Providers Association, an industry group, released a paper recommending that super savings be set aside specifically for aged care and withdrawn as a lump sum to pay for housing.
“An alternative could be a mandatory savings approach, where part of the pension guarantee contributions is set aside to pay for the costs of elder care,” it said.
The group’s CEO, Tom Symondson, who is a member of the government’s Aged Care Taskforce, said ‘those with the means should be asked to pay’ for housing and lifestyle.
“We want to see a system that encourages the use of pensions as they were intended,” he said.
The issue paper also suggested charging estate tax to a deceased estate for “retirement if it is not used for retirement as intended.”
The association also called for an increase in the Medicare levy to fund elder care, up from the existing two percent level, as one of several “future funding options,” including higher taxes or a new Social Security scheme.
The Medicare levy was increased from 1.5 percent in July 2014 to fund the National Disability Insurance Scheme.
Wealthier retirees could also be called upon to top up their super to fund their elder care, even as mandatory employer contributions rose 0.5 percentage points to 11 percent on July 1.
“For those who can afford it, consideration should be given to increased consumer contributions in aged care housing and lifestyles that people have funded throughout their lives,” the paper said.
The Royal Commission on the Care of the Elderly in March 2021 recommended minimum staffing to tackle substandard care issues, and Labor went to the 2022 election promising to always have a nurse on duty within a year.
“The Royal Commission into Aged Care Quality and Safety recognized that current aged care funding schemes are not well designed to support a sustainable system in the future,” the newspaper said.
‘Older Australians deserve better.’
The Aged and Community Care Providers Association released a paper recommending that super savings be set aside specifically for aged care and withdrawn as a lump sum payment to pay for housing (stock image)
The association argued that the existing elder care funding model, based on general tax revenue, was not working despite the Department of Health and Aged Care receiving special appropriations of $31.154 billion in 2022-2023, compared to $14.441 billion for Defense.
The federal government’s May budget was also set aside $11.3 billion over four years to fund a 15 percent increase in wages for aged care workers on July 1.
Ms Wells set up a 16-member aged care task force in June, to meet monthly in 2023, after aged care groups raised concerns about meeting new staffing needs.
Former Liberal Premier of New South Wales, Mike Baird, and former Labor Deputy Premier, John Watkins, who are now both healthcare and aged care executives, sit on this panel.