A government-appointed taskforce says a special aged care levy would not be fair to future generations when older Australians are retiring with growing levels of wealth.
Wealthy Australians should draw down their superannuation and pay more for their aged care costs – particularly their everyday living expenses such as meals, laundry and cleaning – a major review of aged care funding has told the Albanese government.
The taskforce said there was a strong case for increasing co-contributions for those with the means to do so.Over the next decade alone, the independent Parliamentary Budget Office estimates the cost of aged care will climb by more than 82 per cent – or almost $29 billion – to $63.6 billion in 2033-34.
While the taskforce supported the government maintaining its central role in funding aged care, it said it did not back a specific tax increase for future aged care costs, such as a Medicare-style levy“There are substantial intergenerational equity issues in asking the working age population, which is becoming proportionally smaller, to pay for these services,” it said.
“Superannuation trends, combined with high asset wealth through the family home and other investments, mean increasingly people still have accumulated wealth and income streams when they need to access aged care services,” the report said. At the moment, there is a means test for “care costs”, which requires some people to contribute out of their own pocket, but this is limited to around $33,000 a year, or $78,500 over a lifetime. The basic daily living fee is also capped: set at 85 per cent of the age pension, or about $61 a day.
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