Aged Care CEO Calls for Wealthier Australians to Use Superannuation for Care Costs
Tracey Burton, chief executive of Uniting NSW and ACT, has urged wealthier Australians to reconsider using their superannuation for aged care expenses rather than preserving it as inheritance for the next generation. Speaking ahead of an industry event, Burton emphasized the need for a cultural shift in how superannuation is perceived, particularly as the country's aged care system faces significant funding challenges.
Cultural Shift Needed in Superannuation Mindset
Burton highlighted that some wealthier individuals believe they are entitled to fully publicly funded aged care, even while maintaining large superannuation balances intended for inheritance. "A culture change is needed," she stated, noting that the system cannot afford to cover all care costs due to government budget limitations. She argued that superannuation, which totals approximately $4 trillion nationally, should be viewed as a resource for funding retirement needs, including aged care, rather than as intergenerational wealth.
"This idea that superannuation is intergenerational and for passing on to your kids. It's not. It is there to help you have the best retirement you can have, so spend it on what you need, and if that's the aged care system, then spend it there," Burton explained. She acknowledged that shifting this mindset would be difficult, as many people feel entitled to public funding after paying taxes throughout their lives.
Government Taskforce Recommendations and Funding Shortfalls
The federal government's aged care taskforce in 2024 recommended that wealthier Australians should contribute more to their aged care costs. The taskforce found that a growing proportion of people aged 85 and older will have remaining savings in the coming decades, including those with significant funds available for aged care. However, Burton warned that the work of the landmark royal commission into aged care remains incomplete, with 200,000 people still on waiting lists for in-home care and support.
She pointed out that full pensioners often cannot afford co-payments for basic services like showering assistance, specialized transport, or respite care. Uniting advocates for automatically exempting full pensioners from these co-payment rules, a change estimated to cost about $50 million annually. "Showering in home care is not considered part of clinical care at the moment, which means that some people have to pay a co-contribution, and if they can't afford that, they'll miss out on the assistance. The consequences of that are significant," Burton added.
Recent Government Initiatives and Demographic Challenges
Labor's new aged care laws, which came into effect in November, include a $4.3 billion investment in the Support at Home program and a pledge to provide 83,000 additional places by the end of the financial year. Additionally, the federal government announced $115 million in new funding through the Aged Care Capital Assistance Program to increase access to residential aged care in hotspots such as Adelaide, the Illawarra, Perth, and the Hunter region.
Burton praised these efforts, including extra funding for the aged care workforce and increased nurse presence in residential care settings. However, she emphasized that Australia's aged care system faces a demographic timebomb, with the population over 65 expected to double and the percentage of working-age individuals declining. This underscores the urgency of addressing funding gaps and encouraging personal responsibility in aged care financing.
Uniting, a non-profit organization, operates 70 residential aged care homes, 90 retirement villages, and provides home care services, along with hospitals, disability care, and social services. Burton's call for a national conversation on superannuation use aims to involve lobby groups for older Australians in finding sustainable solutions to the aged care crisis.
