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Aged-care tsunami

International Business Times:  Aged-care tsunami

Much of the discussion about the rapid ageing of the population has focused on the huge numbers of baby boomers who are either retiring or on the eve of retirement.

But, of course, the deluge of new or imminent retirees will lead to burgeoning numbers of older Australians in need of aged care.

And one of the big questions is how to pay for this aged-care tsunami.

Expect the financing of aged care to be an issue of growing debate that will have considerable personal financial implications.

The Productivity Commission is conducting a public inquiry named Caring for Older Australians, and earlier this year released a draft report.

Among the initial proposals by the commission is that individuals contribute to their aged care costs (within a maximum lifetime limit), and pay their own accommodation and everyday living expenses (with safety nets). And under this proposal, health services would be subsidised.

Key points made by the commission in its draft report include: 

  • The number of people over 85 is projected to increase from 0.4 million in 2010 to 1.8 million (of the population) by 2050.
  • Federal Government spending on aged care will rise from 0.8 per cent of GDP in 2010 to 1.8 per cent by 2050, estimates the 2010 Intergenerational Report.
  • Many older Australians have substantial wealth, giving them the "capacity to meet their lifetime accommodation costs and to make a greater contribution to the costs of their care".
  • The aged-care workforce will have to grow at a time when ageing is reducing the proportion of the population still in the overall workforce.
  • There are unquestionably plenty of challenges ahead.

 

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