How much is too much for aged care?
A nationwide survey has found that over 60 percent of taxpayers would be willing to pay more tax in return for quality aged care.
The survey, commissioned by the Royal Commission into Aged Care Quality and Safety, was conducted by Professor of Health Economics Julie Ratcliffe and her colleagues at Flinders University’s Caring Futures Institute.
Professor Ratcliffe and her colleagues published their findings in the Medical Journal of Australia in September 2021, after designing the survey to determine Australians’ willingness to pay more for better aged care.
“At present, four percent of Australia’s income tax contributions are allocated to aged care,” the researchers wrote.
“Modelling by the Commission indicates that a doubling of this expenditure base may be required in the short to medium term to meet the needs of Australia’s rising numbers of old people.”
The team surveyed 6500 current income taxpayers who are not receiving aged care.
“We found that 61 percent of current income taxpayers would be willing to pay an additional 1.4 percent income tax per year on average to ensure a satisfactory level of aged care, while income taxpayers would be willing to pay an additional 3 percent income tax per year to achieve high quality aged care,” they said.
Interestingly, the researchers found that respondents who had an aged care experience through close family members were willing to pay more to ensure “universal access to satisfactory or high quality care”, while those who hadn’t were less willing.
“Similarly, younger people were also willing to pay slightly more than older people to ensure universal access to satisfactory or high quality care,” the team wrote.
However, Professor Ratcliffe and her colleagues said increasing income tax contributions wouldn’t be enough to bolster the aged care system as the number of older Australians continues to grow.
The survey comes as the ratio of working age Australlians to those aged over 85 continues to decline, from a 101:1 ratio in 1978 to 33:1 in 2018.
By 2058, it is expected that there will only be 15 working Australians for every person aged 85 or older.
To combat this, the team suggest a combination of contributions from income tax, “means-tested personal co-contributions and voluntary self-funded contributions for extra services or supports”.
Elsewhere, in countries such as Japan and Germany, similar schemes are used to pay for aged care, including compulsory social insurance, taxing superannuation earnings over a certain threshold, and private insurance.
“As a society, we need to take collective responsibility, building upon the foundations laid by our Australia-wide survey to carefully consider all options for ensuring the quality, safety and sustainability of Australia’s aged care system for all Australians in need, now and into the future,” the researchers concluded.
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