Rich boomers may have to pay more for aged care

The Aged Care Task Force has advised that baby boomers who can afford to pay more for aged care should do so.

The task force has advised Aged Care Minister Anika Wells to change means-testing for aged care services to require wealthier Australians to pay more out of their pocket, the Sydney Morning Herald reports.

Currently, more than $30bn of taxpayers' money supports elderly Australians with the cost of aged care.

According to figures from the the Parliamentary Budget Office, this is estimated to rise by $29bn over the next decade.

A report by the task force will be published before the end of January and is expected to recommend that consumers increase their contributions to alleviate the pressure on taxpayers while maintaining the high quality of services.

The federal government is expected to respond to its recommendations later in the year, most likely during the May budget.

Daily living fees for those in residential care, currently set at $61 a day, could also be lifted for those with greater wealth.

Taxpayers currently cover 96 per cent of the total cost of residential aged care, leaving just 4 per cent paid in consumer contributions.

This is largely because existing means tests cap payments at $33,000 yearly or $78,500 over a lifetime.

This is all expected to change under the government task force's advice.

Another significant change is how the family home contributes to means tests, with the current system requiring the home's maximum value to sit below $198,000.

The recommendation is not a major shock after Ms Wells indicated during a National Press Club speech in June that the government expected aged care contributions would need to increase to keep up with quality improvements.

“Plenty of people have said: ‘I am prepared to pay for an innovative, excellent model of care – I just can’t find it’,” she said.

Ms Wells is expected to formally respond to the task force report once published.

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