For decades, the term 'retirement' has always been linked with 'superannuation'. Superannuation funds, commonly known as 'super', have been a reliable source of financial support for older Australians during their golden years.

But now, a major change on the horizon could completely reshape the world of superannuation as we know it. This change has the potential to significantly alter how retirees use their savings, marking a monumental shift in the retirement landscape.

The aged care sector in Australia is facing a funding crisis, and the peak advocacy group for the sector, the Aged and Community Care Providers Association (ACCPA), has put forth some potential solutions.

They recently released an issues paper at a national summit, suggesting two main alternatives to address the funding shortfall.

Older Aussies could soon be forced to use their superannuation for aged care or pay an inheritance tax on their estate under a radical proposal put to the federal government. Credit: Shutterstock.

Firstly, they proposed that Australians could consider setting aside some of their superannuation savings to improve the standards in aged care. The superannuation system, with a value of $3.5 trillion, could play a part in addressing the funding gap.

By allocating a portion of people's superannuation funds specifically for aged care costs, there could be a way to bolster the funding available for this critical sector.

Secondly, the ACCPA discussed possibly implementing a new social insurance scheme or a Medicare-style levy. These alternatives could help bridge the financial gap and ensure adequate funding for aged care services.

These suggestions come in the wake of distressing revelations about the neglect of elderly Australians that came to light during the 2021 aged care royal commission.

The aged care sector's challenges are complex and multi-faceted, including insufficient funding and an aging population. The recent federal budget revealed that aged care costs for the coming financial year had increased significantly due to recommendations made by the royal commission.

Despite the increase in funding, the sector's allocation remains relatively low, with federal aged care funding accounting for only 1.2 per cent of the country's GDP, well below the OECD average of 2.5 per cent. However, there are plans to further increase funding for the sector, with projections indicating it will reach nearly $40 billion by the fiscal year 2026-27, including funds for a 15 per cent pay rise for aged care workers over the next four years.

While the federal government will continue to be the primary source of funding, the ACCPA's proposal to utilise a portion of superannuation savings could be one way to address the ongoing funding crisis and improve the quality of care for elderly Australians.

According to ACCPA's CEO Tom Symondson, the superannuation system aims to ensure financial independence for people during retirement by providing a source of income.

However, the system faces an issue where superannuation savings are sometimes passed on as inheritance instead of being used for aged care services, contrary to its intended purpose.

'We want to see a system that encourages the use of superannuation as it was intended,' he explained.

In 2021, the Productivity Commission released a research paper predicting that approximately $3.5 trillion in assets would change hands in Australia by the middle of the century, with the superannuation system playing a crucial role in this wealth transfer.

​

The issues paper proposes the implementation of an inheritance tax on a deceased estate if the funds from 'superannuation' are not used as intended for retirement—even though Australia abolished inheritance taxes in July 1979, following Queensland's National Party premier Joh Bjelke-Petersen's efforts to eliminate death duties.

Under this proposal, wealthier retirees may also be required to contribute additional funds to their superannuation to cover their aged care expenses, despite the recent increase in compulsory employer contributions to 11 per cent on July 1.

Key Takeaways

• The Aged and Community Care Providers Association (ACCPA) has proposed that some of Australians' superannuation savings should be set aside to help improve standards in aged care and address the sector's funding shortages.
• The ACCPA has revealed harrowing details of neglect towards elderly Australians in the 2021 Aged Care Royal Commission and claims the funding problems will be further exacerbated as Australia's population ages.
• ACCPA CEO Tom Symondson noted that superannuation savings are frequently passed on as inheritance rather than paying for aged care services. The executive called for a system where superannuation is used as it was intended.

Members, what are your thoughts on these proposals? Share your opinions with us in the comments below.

 

[mylittletibbies]

When was this , I'm 61

Did you not know that a component of the taxes you paid was for the pension. This was back from when aged pension first started, just as a portion of tax now is for Medicare.
I don't know exactly when it was that the powers that be,some say Liberal some say Labour, couldn't keep their grubby hands off this money and started using it as their own piggy bank.
Then they told us that we had to have superannuation to pay for our pension, due to their mismanagement. To make it a bit more palatable to the general public and avoid a great outcry, they decided that your boss could pay for it. That was the last nail in the coffin for my business, one more expense that I couldn't pass on to my customers. I had to close down my business, putting 22 people out of work. How many other small businesses did this happen to.
Can you imagine how much tax the government already makes every year from the tax on our superannuation. Maybe a better idea would if they didn't tax our superannuation interest every year and then there would be more money in our super and that money could be put towards our own age care instead of being spent on whatever they dream up to put it towards. If we were to pay an extra levy now, on top of the original one, after all that levy, tax or whatever you like to call it, was never stopped, we are still paying it, so any extra levy we paid would just end up going the same way as before.
You can't win.

 

[mylittletibbies]

P

We did. We split it into three or four separate lots, putting it into term deposits for 3-6 months depending on rates. Been doing it for over 10 years.

Problem with this solution is that you don't get all your money if you opt for early withdrawal. A large percentage is retained by the government

 

[mylittletibbies]

Women are disadvantaged straight from start. Lower income/having children/time of work to care for children/ GFC. Iv got 6mths to go I’m pulling all my super before govt gets their hands on it.

They will get their hands on it any way, there is a large penalty for taking your super in a lump sum.

 

[mylittletibbies]

I live from my Super as I am a self funded retiree and I paid a lot of extra money into my super , so I can live a comfortable retirement .
Now Albo and his Labour Party want us to pay tax over it .It is our money .
I don’t get a pension . Most countries like NZ , UK and most European countries get an old age pension , no matter what you have in your bank account , every single person get an old age pension.
So stay off our Super and save some money by stop traveling the world . Spend our tax money wisely , like most of us do.
Now we are all in this mess due to all the Labour voters and for me there will be a big NO on the Voice referendum.

Me too, billions are already paid out through endless agencies to help indigenous people, the Voice will only create another one, along with all the expenses to run that one and nothing will change.
How come all the billions now paid out do not solve the problems. Where does this money go, how come such a large sum of money seems to make no difference.
Black or white there is still the problem that you can't help someone who won't help themselves.
They have been given homes, they wreck them, different areas provide transport and breakfast to get their children to go to school, otherwise a large percentage of them don't go.
They run buses to scour the streets at night picking up young children at all hours, who should be home in bed, but their parents are too inebriated to care where they are or what they are doing.
Then they carry on about their youth being over represented in prison, whose fault is that, why are they out commiting crimes, they are not in their for no reason.I saw an elder on TV saying that they should be allowed to take these youths back to country and look after them themselves. That would be all and good if that was what they did, but this lack of "looking after them"is the exact reason they are where they are.
I am not a racist, my son's best friend is indigenous and is always welcome
in our home. Our tenants are indigenous, and look after our property. I am well aware that there is a lot of so-called.white trash out there and a lot of trouble hearing is also caused by white youth, but setting up a Voice is not the solution.
Use the.billions already allotted more sensibly, if things are not working maybe sack some of the fat cats that run these other agencies and find people who know what they are doing and can produce results instead of throwing good money after bad.

 

[Mina vriesekolk]

I know the feeling and the urine smell in the nursing homes .
I did work agency nursing first after I arrived in AU from Europe and I had to wait to get my registration for Registered Nurse (RN) . So I had to work as an assistant nurse and as soon as I walked into a Nursing home and smelled the fumes of urine , I knew it was run badly .
In Sydney on place the very oldies had to sit outside on the verandah after they had an early shower , ladies in a thin summer dress , bare feet and complaining they were so cold , I gave them some blankets and put their feet up . But what a life to spend your last years like that .
The food was terrible , mostly tripe in some watery sauce , I had a taste and had to spit it out . No wonder so many relatives bring in food for their loved ones .
The politicians should go and have a visit in these nursing homes , just un announced, then you see the real thing .

 

[Mina vriesekolk]

Me too, billions are already paid out through endless agencies to help indigenous people, the Voice will only create another one, along with all the expenses to run that one and nothing will change.
How come all the billions now paid out do not solve the problems. Where does this money go, how come such a large sum of money seems to make no difference.
Black or white there is still the problem that you can't help someone who won't help themselves.
They have been given homes, they wreck them, different areas provide transport and breakfast to get their children to go to school, otherwise a large percentage of them don't go.
They run buses to scour the streets at night picking up young children at all hours, who should be home in bed, but their parents are too inebriated to care where they are or what they are doing.
Then they carry on about their youth being over represented in prison, whose fault is that, why are they out commiting crimes, they are not in their for no reason.I saw an elder on TV saying that they should be allowed to take these youths back to country and look after them themselves. That would be all and good if that was what they did, but this lack of "looking after them"is the exact reason they are where they are.
I am not a racist, my son's best friend is indigenous and is always welcome
in our home. Our tenants are indigenous, and look after our property. I am well aware that there is a lot of so-called.white trash out there and a lot of trouble hearing is also caused by white youth, but setting up a Voice is not the solution.
Use the.billions already allotted more sensibly, if things are not working maybe sack some of the fat cats that run these other agencies and find people who know what they are doing and can produce results instead of throwing good money after bad.

Totally agree.

 

[Pat T]

P
Problem with this solution is that you don't get all your money if you opt for early withdrawal. A large percentage is retained by the government

Me too, billions are already paid out through endless agencies to help indigenous people, the Voice will only create another one, along with all the expenses to run that one and nothing will change.
How come all the billions now paid out do not solve the problems. Where does this money go, how come such a large sum of money seems to make no difference.
Black or white there is still the problem that you can't help someone who won't help themselves.
They have been given homes, they wreck them, different areas provide transport and breakfast to get their children to go to school, otherwise a large percentage of them don't go.
They run buses to scour the streets at night picking up young children at all hours, who should be home in bed, but their parents are too inebriated to care where they are or what they are doing.
Then they carry on about their youth being over represented in prison, whose fault is that, why are they out commiting crimes, they are not in their for no reason.I saw an elder on TV saying that they should be allowed to take these youths back to country and look after them themselves. That would be all and good if that was what they did, but this lack of "looking after them"is the exact reason they are where they are.
I am not a racist, my son's best friend is indigenous and is always welcome
in our home. Our tenants are indigenous, and look after our property. I am well aware that there is a lot of so-called.white trash out there and a lot of trouble hearing is also caused by white youth, but setting up a Voice is not the solution.
Use the.billions already allotted more sensibly, if things are not working maybe sack some of the fat cats that run these other agencies and find people who know what they are doing and can produce results instead of throwing good money after bad.

 

[Pat T]

Totally agree.

Maybe all those skimming from the funds should be sacked and start again. Limit white fat cats, get some one who cares about the indigenous, to regularply check and find out their needs.

 

[Cheezil]

For decades, the term 'retirement' has always been linked with 'superannuation'. Superannuation funds, commonly known as 'super', have been a reliable source of financial support for older Australians during their golden years.

But now, a major change on the horizon could completely reshape the world of superannuation as we know it. This change has the potential to significantly alter how retirees use their savings, marking a monumental shift in the retirement landscape.

The aged care sector in Australia is facing a funding crisis, and the peak advocacy group for the sector, the Aged and Community Care Providers Association (ACCPA), has put forth some potential solutions.

They recently released an issues paper at a national summit, suggesting two main alternatives to address the funding shortfall.

View attachment 26673

Older Aussies could soon be forced to use their superannuation for aged care or pay an inheritance tax on their estate under a radical proposal put to the federal government. Credit: Shutterstock.

Firstly, they proposed that Australians could consider setting aside some of their superannuation savings to improve the standards in aged care. The superannuation system, with a value of $3.5 trillion, could play a part in addressing the funding gap.

By allocating a portion of people's superannuation funds specifically for aged care costs, there could be a way to bolster the funding available for this critical sector.

Secondly, the ACCPA discussed possibly implementing a new social insurance scheme or a Medicare-style levy. These alternatives could help bridge the financial gap and ensure adequate funding for aged care services.

These suggestions come in the wake of distressing revelations about the neglect of elderly Australians that came to light during the 2021 aged care royal commission.

The aged care sector's challenges are complex and multi-faceted, including insufficient funding and an aging population. The recent federal budget revealed that aged care costs for the coming financial year had increased significantly due to recommendations made by the royal commission.

Despite the increase in funding, the sector's allocation remains relatively low, with federal aged care funding accounting for only 1.2 per cent of the country's GDP, well below the OECD average of 2.5 per cent. However, there are plans to further increase funding for the sector, with projections indicating it will reach nearly $40 billion by the fiscal year 2026-27, including funds for a 15 per cent pay rise for aged care workers over the next four years.

While the federal government will continue to be the primary source of funding, the ACCPA's proposal to utilise a portion of superannuation savings could be one way to address the ongoing funding crisis and improve the quality of care for elderly Australians.

According to ACCPA's CEO Tom Symondson, the superannuation system aims to ensure financial independence for people during retirement by providing a source of income.

However, the system faces an issue where superannuation savings are sometimes passed on as inheritance instead of being used for aged care services, contrary to its intended purpose.

'We want to see a system that encourages the use of superannuation as it was intended,' he explained.

In 2021, the Productivity Commission released a research paper predicting that approximately $3.5 trillion in assets would change hands in Australia by the middle of the century, with the superannuation system playing a crucial role in this wealth transfer.

View attachment 26708​

The issues paper proposes the implementation of an inheritance tax on a deceased estate if the funds from 'superannuation' are not used as intended for retirement—even though Australia abolished inheritance taxes in July 1979, following Queensland's National Party premier Joh Bjelke-Petersen's efforts to eliminate death duties.

Under this proposal, wealthier retirees may also be required to contribute additional funds to their superannuation to cover their aged care expenses, despite the recent increase in compulsory employer contributions to 11 per cent on July 1.

Key Takeaways

• The Aged and Community Care Providers Association (ACCPA) has proposed that some of Australians' superannuation savings should be set aside to help improve standards in aged care and address the sector's funding shortages.
• The ACCPA has revealed harrowing details of neglect towards elderly Australians in the 2021 Aged Care Royal Commission and claims the funding problems will be further exacerbated as Australia's population ages.
• ACCPA CEO Tom Symondson noted that superannuation savings are frequently passed on as inheritance rather than paying for aged care services. The executive called for a system where superannuation is used as it was intended.

Members, what are your thoughts on these proposals? Share your opinions with us in the comments below.

OUR super fast becoming NOT our own, this seems so unfair to those who've worked hard & paid taxes that go anywhere but where taxpayers think they should go! Not every person is going to need Aged Care/nursing homes, etc! Wrong!!
I'm 62 & even tho I'm over preservation age & working i cannot touch my super & use it the way I'd like to use it (ie limited minimum & maximum amounts i can withdraw according to stinking govt rules & onky via transition to retirement - not allowed to draw it all out or as much as I'd like out until I'm 65yo & by then will be too late, stinking govts will harshen the rules even more & or have MY money all spent somewhere else (ie Aged Care, admin, etc) & there's nothing i can do about it?
What a rort! If i had my time again there's no way i would contribute to super other than the Super Guarentee. Easy to Accumulate it, near impossible to access it (so many big wigs making money from OUR super, no wonder they (super companies & advisors, govts, etc) all want to hang on to it & fight us tooth & nail to get & keep their mitts on it

 

[Cheezil]

I find this scary to think the Government are dictating one again on how and where our money is used. We've worked hard, added to super, drawn down via pension stream but might now be penalised for not using every cent of it before we pass. It's a guessing game how much super you'll need to carry you through to end of life. How is anyone to know that and why should any Government be able to further tax the left over? Is criminal.

100% agree, why bother working when all you get is knifed & ripped off- legalized robbery!

 

[KSS]

Your superannuation was paid by your employer, not by you. Don't distort the truth, and the original retirement fund was raided by the libs not labor. It's true that super was introduced because a future government would be not able to afford the age pension as there would be so many age pensioners and not enough tax payers. The superannuation policy is great, you don't contribute unless you want to and people will retire with a sizable lump sum with which they can invest or buy annuities etc. and live very comfortably. If the lib's hadn't stolen the money from the original retirement fund we would all be living comfortably.

That the employer paid the superannuation is true but it is still our money in exactly the same way the employer paid your salary/wages. In effect, it is the employee giving up a portion of their earned income to save for their retirement. It is not a benevolent act by an employer at all but an enforced savings plan at a prescribed rate levied at a percentage of the wage currently 11%. SO please as you say, don't distort the truth.

 

[Mina vriesekolk]

Milkydrip is wrong . Out of my wages I paid 50% and the employer paid 50% and I put in voluntarily a lot more in , so I can have a comfortable retirement . That means it is my money and government have to keep their hands of that . Because I am a self funded retiree and save the government already sooo much money as I don’t get a pension . I live an easy lifestyle and spend my money wisely , don’t take expensive holidays and go out only occasionally . I could have spend heaps more by go out for meals and drinks more often , I might be on a pension . Because I live this lifestyle I could be punished . ALBO , STAY OF MY SUPER!

 

[mikydrip]

Mina under the super guarantee your employer has to put in the equivalent of 11% of you earnings, if you contribute that is up to you so if your employer is doing something different you need to have a talk with him unless it is to your advantage.
I worked for big companies all my life and paid the full amount of tax I was liable for. Unfortunately my wife and I only had 10 years of superannuation and so didn't accumulate very much. We are both on the age pension and live quite comfortably.

 

[mikydrip]

As a reminder, this is not government policy, but a proposal, along with another, by the 'Age and Community Providers Association'

 

[mylittletibbies]

That the employer paid the superannuation is true but it is still our money in exactly the same way the employer paid your salary/wages. In effect, it is the employee giving up a portion of their earned income to save for their retirement. It is not a benevolent act by an employer at all but an enforced savings plan at a prescribed rate levied at a percentage of the wage currently 11%. SO please as you say, don't distort the truth.

Mina under the super guarantee your employer has to put in the equivalent of 11% of you earnings, if you contribute that is up to you so if your employer is doing something different you need to have a talk with him unless it is to your advantage.
I worked for big companies all my life and paid the full amount of tax I was liable for. Unfortunately my wife and I only had 10 years of superannuation and so didn't accumulate very much. We are both on the age pension and live quite comfortably.

Exactly right

 

[mylittletibbies]

Same old chestnuts, "I worked all my life, paid all my taxes". If you don't get the pension it's because you're too rich, if you do get it think yourself fortunate, a lot of countries you wouldn't get it. I believe it was a liberal stole the money from the retirement fund. The beauty of superannuation is that it is paid by the employer and is meant for peoples retirement, If one goes into age care you are still retired, so why shouldn't you contribute out of your own funds. You complain about others getting government benefits and forget what you are getting, pension, healthcare, senior discounts etc. Try living in a 'not so lucky country'.

In the not so lucky countries they are not taxed as heavily as we are. We are the 4th highest taxed country in the world and they want to take more.
The only countries taxed higher than us are Belgium, Denmark and Iceland.and none of these are classed as not so lucky. countries.
There are thousands of people in this country who have paid the highest taxes and receive neither healthcare, pension or senior discounts there called self funded retirees and they save the country a fortune.
Other countries pay all their retirees a pension once they reach retirement age, New Zealand for one does.not means test their pensioners.
We are no longer the lucky country, or hadn't you noticed.
People have a good right to complain as pollies continue to flit around the
world and dream up ways to line their own greedy pockets and look for more ways to fleece us.
And as far as complaining about others getting payments, my opinion is, take care of those who have already spent a lifetime paying taxes for what was meant for their old age and worry about paying the young ones, who are only beginning to pay taxes whatever can be afforded after taking care of those who have already payed their way
As I said before, we didn't get first home buyer grants, parental leave, subsidised child care, our parenting allowance (child endowment, as it was called) was, wait for it , a whopping $2/month.
So yes, I did work hard my whole life yes I did pay my taxes, and yes I will bloody well complain. If you are happy with the status quo then good for you, but as you can see most of us are not and we are entitled to say so.

 

[mylittletibbies]

That the employer paid the superannuation is true but it is still our money in exactly the same way the employer paid your salary/wages. In effect, it is the employee giving up a portion of their earned income to save for their retirement. It is not a benevolent act by an employer at all but an enforced savings plan at a prescribed rate levied at a percentage of the wage currently 11%. SO please as you say, don't distort the truth.

This is true, this was forced on the employer, by the government,
Not all employers are large multi nationals, or mining companies, who pay next to no tax.
The majority of them are small business owners, already struggling in many cases under govt charges and then get hit with this extra charge
No one seems to realise just how many of these businesses went to the wall when this came in, unable to pass this additional cost on, I know because I was one of them.
These small business owners in many cases cannot afford superannuation for themselves, but are expected to pay it for their employees.
Many years previously, when I was an employee, I thought it was wonderful when holiday leave went up from 2 weeks to 4, sick days went up, I got 17-1/2% loading on my holiday pay, being paid more to go on holidays than to work. Never gave a thought to whether my boss could actually afford to pay all this Then we wonder why all our jobs disappeared off shore, we just priced ourselves out of the market.

 

[Cheezil]

Milkydrip is wrong . Out of my wages I paid 50% and the employer paid 50% and I put in voluntarily a lot more in , so I can have a comfortable retirement . That means it is my money and government have to keep their hands of that . Because I am a self funded retiree and save the government already sooo much money as I don’t get a pension . I live an easy lifestyle and spend my money wisely , don’t take expensive holidays and go out only occasionally . I could have spend heaps more by go out for meals and drinks more often , I might be on a pension . Because I live this lifestyle I could be punished . ALBO , STAY OF MY SUPER!

100% well said, it's so unfair

In the not so lucky countries they are not taxed as heavily as we are. We are the 4th highest taxed country in the world and they want to take more.
The only countries taxed higher than us are Belgium, Denmark and Iceland.and none of these are classed as not so lucky. countries.
There are thousands of people in this country who have paid the highest taxes and receive neither healthcare, pension or senior discounts there called self funded retirees and they save the country a fortune.
Other countries pay all their retirees a pension once they reach retirement age, New Zealand for one does.not means test their pensioners.
We are no longer the lucky country, or hadn't you noticed.
People have a good right to complain as pollies continue to flit around the
world and dream up ways to line their own greedy pockets and look for more ways to fleece us.
And as far as complaining about others getting payments, my opinion is, take care of those who have already spent a lifetime paying taxes for what was meant for their old age and worry about paying the young ones, who are only beginning to pay taxes whatever can be afforded after taking care of those who have already payed their way
As I said before, we didn't get first home buyer grants, parental leave, subsidised child care, our parenting allowance (child endowment, as it was called) was, wait for it , a whopping $2/month.
So yes, I did work hard my whole life yes I did pay my taxes, and yes I will bloody well complain. If you are happy with the status quo then good for you, but as you can see most of us are not and we are entitled to say so.

Very well said!

 

[mikydrip]

Either Mina's superannuation was outside Australia or she had an employer that was not following the rules, but there is something that is not quite factual about her statement. Come clean Mina.