Superannuation review must consider aged care

Any review of the retirement income system must also consider options for financing care and accommodation that meet the changing needs of older Australians, according to peak aged care body, Leading Age Services Australia (LASA).

Posted July 10th 2015

by super

The Productivity Commission report, released this week, about superannuation policy identified a number of elements of the current retirement income system that warrant a holistic review.

“For many Australians, accessing age services is the next natural progression in life following retirement,” says Patrick Reid, LASA chief executive.

“It makes sense any review of our current retirement income system must include consideration of the affordability and funding arrangements of age services,” he says.

According to Mr Reid, there is already a shift towards increasing consumer contributions.

“LASA supports this, but the social and financial impact of these changes is yet to be realised,” he adds.

The real costs of caring for older Australians are increasing at three times what the government believes, as demonstrated by the miniscule indexation increase of 1.3% last week.

“These costs are only going to increase over time and, unless a serious review of funding for age services is carried out, we are going to end up with a very skewed, inequitable situation with most Australians unable to afford and access the care they need.”

If the preservation age is raised from 60 to 65 years between 2035 and 2043, the first group of people affected are those who are currently in their mid 30s.

“The current funding for age services is very much tied to asset ownership and this usually involves the family home. People in their mid 30s are not as wedding to property investment as baby boomers were, so right there is a significant factor that will influence aged care funding in the next few decades,” he says.

“Ensuring a sustainable age services industry that meets the needs of all older Australians is as much about today's younger generations as it is about those who are closer to needing such services.

“As the voice of aged care, LASA members must be invovled in any review of the current retirement funding policy to ensure we have an industry that is funded and structured to perform highly.”