Sep 14, 2021

Most Australians prepared to pay 3% more tax to receive high quality aged care

Most Australians prepared to pay 3% more tax to receive high quality aged care

A new study published in The Medical Journal of Australia found that 61% of Australia’s income taxpayers would be prepared to pay an additional 1.4% in income tax every year to ensure universal access to a “satisfactory” standard of aged care, while 55% of taxpayers would be willing to pay an additional 3% in tax to achieve “high quality” aged care services.

The study also found that Australians with direct experience of aged care through a close family member were willing to pay more to guarantee universal access to a satisfactory or high quality standard of care, compared with those who had no experience of the aged care system.

Younger people were also willing to pay more than older people to ensure universal access to satisfactory or high quality care.

The study consisted of a survey of 6,500 taxpayers who were not receiving aged care services, and was conducted by Professor Julie Ratcliffe, Professor of Health Economics at Flinders University’s Caring Futures Institute.

Professor Ratcliffe and her colleagues were commissioned by the Royal Commission into Aged Care Quality and Safety to investigate Australians’ willingness to pay more for higher standards of aged care.

“At present, 4% of Australia’s income tax contributions are allocated to aged care,” Professor Ratcliffe and colleagues 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 older people.”

Another matter to consider in discussions about taxpayer contributions to aged care is the declining ratio of working-age Australians to those aged over 85 years and older.

As a consequence, increasing the income tax contribution to aged care will not be enough to sufficiently bolster the aged care system.

“There will be an increasing need for additional pillars of financial support beyond the current system, comprising income tax contributions as the major financial pillar supplemented by means-tested personal co-contributions and voluntary self-funded contributions for extra services or supports,” Professor Ratcliffe and her colleagues wrote.

“As a society, we need to take collective responsibility… 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,” they concluded.

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