Sunrise host Nat Barr has questioned Labor minister Jason Clare over a bold proposal to set aside some of a person’s superannuation for their future aged-care costs.
In June, Aged Care Minister Anika Wells announced a task force would be set up to advise the federal government on how to get more funding into aged care.
Assistant Treasurer Stephen Jones on Thursday said the task force would consider a range of funding options, but the nation needed to look at the possibility of some people being made to ‘ring-fence’ part of their superannuation to fund their care.
On Friday morning, Barr confronted Mr Clare about whether this proposal would be seriously considered by the government as a feasible option.
‘So you would consider using a slice of a person’s super to pay for the aged care costs?’ she said.
‘Well Nat this is an independent review,’ the education minister responded.
‘I’m doing 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 the ideas they come up with and see if they’re good, bad or indifferent.’
The pair agreed about the appalling state of aged-care in Australia which was revealed in the damning Royal Commission into the system.
‘Half of aged-care centres can’t even afford to operate, but is that something you look at and think, ‘That’s a good idea’?’ Barr asked in reference to the Superannuation solution.
Mr Clare said he ‘didn’t want to interfere’ in the process of the independent review.
‘The whole point of an independent review is not for politicians to say what they like and what they don’t like but get the expert advice, invite feedback from the community, and then politicians can look at it at the end of the year,’ he said.
The education minister (pictured) explained that an independent review into Australia’s aged-care system that was currently underway and he wasn’t going to interfere with that process
The Aged and Community Care Providers Association, an industry group, has released an issues paper recommending that super savings be specifically set aside for aged care and withdrawn as a lump sum to pay for residential accommodation.
‘An alternative could be a compulsory saving approach for which a proportion of superannuation guarantee contributions is ring-fenced to pay for aged care costs,’ it said.
The group’s chief executive Tom Symondson, who is a member of the government’s Aged Care Taskforce, said ‘those with the means should be asked to pay for’ accommodation and lifestyle expenses.
‘We want to see a system that encourages use of superannuation as it was intended,’ he said.
The issues paper also suggested an inheritance tax be charged to a deceased estate for ‘superannuation if it is not used for retirement as intended’.
The association also called for a Medicare levy increase to fund aged care, up from the existing two per cent level, as one of several ‘future funding options’ including higher taxes or a new social insurance scheme.
The Medicare levy was increased from 1.5 per cent 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 aged care, even though compulsory employer contributions rose by 0.5 percentage points to 11 per cent on July 1.
‘For those who can afford it, there should be consideration of increased consumer co-contributions in aged care for accommodation and lifestyle expenses, which people have funded throughout their lives,’ the paper said.
The Royal Commission into aged care in March 2021 recommended minimum staffing levels to address sub-standard care issues, and Labor went to the 2022 election promising to have an on-call nurse on duty at all times within a year.
The Aged and Community Care Providers Association has released an issues paper recommending that super savings be specifically set aside for aged care and withdrawn as a lump sum to pay for residential accommodation (stock image)
‘The Royal Commission into Aged Care Quality and Safety acknowledged that current financing arrangements for aged care are not well designed to support a sustainable system into the future,’ the paper said.
‘Older Australians deserve better.’
The association argued the existing funding model for aged care, based on general taxation revenue, wasn’t working despite the Department of Health and Aged Care receiving special appropriations funding of $31.154billion in 2022-23, compared with $14.441billion for Defence.
The federal government’s May Budget also set aside $11.3billion over four years to fund a 15 per cent increase in aged care worker wages July 1.
Aged Care Minister Anika Wells in June established a 16-member aged care taskforce, to meet monthly in 2023, after aged care groups raised concerns about meeting new staffing requirements.
Former New South Wales Liberal premier Mike Baird and former Labor deputy premier John Watkins, who are now both health and aged care executives, are on this panel.
