On Sustainable Aged Care Financing in Australia
Australian Economic Review, Volume 54, Issue2, June 2021, 275-284
10 Pages Posted: 2 Jul 2021
Date Written: June 21, 2021
The Final Report of the Royal Commission into Aged Care Quality and Safety (2021) highlighted the challenges in developing a sustainable financing system for Aged Care in Australia. The Report recommended additional funding both in the short term and longer term, to provide an adequate level of aged care quality for older Australians including exploring an actuarially based contributory social insurance scheme for aged care. Sustainable financing of aged care requires a balance between government tax-based financing, individual contributions during working life through an aged care levy, co-payments for aged care costs for those receiving aged care and means testing for these co-payments. There should be a role for private market insurance and financing to supplement government financed aged care support.
Keywords: aged care, aged care levy, care co-payments, government tax-based financing
JEL Classification: H51, H55, G28, G22, H24, I13
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