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Aged Care Financing Taskforce recommendations are an important step for Australia’s retirement system

Media Release 12 March 2024

The Final Report of the Aged Care Financing Taskforce makes sensible recommendations which if adopted will improve the funding for the provision of Aged Care in a fair and equitable manner, says the Association of Superannuation Funds of Australia (ASFA), the voice of super.

“The ageing of the Australian population will lead to a substantial increase in expenditure on aged care, including aged care delivered in the home, and addressing this important pillar of our retirement system is critical,” said ASFA CEO, Mary Delahunty.

“The recommendations of the Taskforce are in line with ASFA’s submission and include changes to charging and means testing arrangements which will ensure that those with accumulated wealth and scope to contribute to the costs of their aged care can do so.

“Importantly, the Taskforce has ruled out ringfencing part of individuals’ superannuation for aged care, which is entirely appropriate – given the true objective of super,” said Ms Delahunty.

The Taskforce noted that the government’s proposed objective for superannuation is ‘to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way and that income from superannuation should be drawn down in retirement to cover health, lifestyle, other living expenses and aged care costs’.

“The Taskforce also has proposed that Refundable Accommodation Deposits be phased out.  This will lead to retirees having greater confidence to draw down their superannuation in retirement.

“However, even with a maturing superannuation system, many individuals will have only modest superannuation balances when they are in their 80s and 90s.  The Superannuation Guarantee going to 12 per cent and there being no further widespread early release of superannuation, such as for housing deposits, will be crucial for future retirees to meet their living expenses, including for aged care when appropriate,” concluded Ms Delahunty.

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