Superannuation should be used for aged care, not inherited by next generation, aged care CEO says | Aged care

Labor should more actively encourage wealthy Australians to spend more of their pensions on their own care, an industry leader says; This, he says, should help free up the capacity in a struggling system to protect underprivileged seniors.

Tracey Burton, chief executive of Uniting NSW and ACT, will tell an industry event next week that some wealthy people believe they are entitled to fully publicly funded aged care, even as they maintain large superannuation balances with the intention of leaving the money to future generations.

“There is a need for a culture change,” he told Guardian Australia before his last major speech before leaving office.

“We need to change the mindset that the system has to pay for all of our maintenance because that will be limited by the amount of money the government can allocate.”

Burton said lobby groups for older Australians should be part of a national debate about the appropriate use of the nation’s $4 trillion in retirement money, and acknowledged superannuation account holders were right to think carefully about their hard-earned savings.

“I think that’s going to be hard to change because some people have an ingrained mentality of, ‘I’ve been paying taxes my whole life and I deserve it.’

“The idea that retirement is intergenerational and will be passed on to your children. It’s not. It’s there to help you have the best retirement you can have, so spend it on what you need, and if that’s what the aged care system is, then spend it there.”

Uniting is a not-for-profit organization that operates 70 residential aged care homes, 90 retirement villages and provides home care services. It also operates hospitals, disability care and various social services.

Wealthy Australians will need to pay more for aged care by 2024, the federal government’s aged care task force has said. It found that a growing proportion of 85-year-olds will remain out of savings over the next two decades, including those with “significant funds” to fund aged care.

Burton warned that the work of the landmark royal commission into aged care was not complete, with 200,000 people left on waiting lists for home care and support.

He said full retirees cannot afford the required contributions for basic services such as shower assistance, private transportation or respite care.

Uniting believes the federal government should automatically exempt full retirees from rules requiring contributions; The estimated annual cost of this change will be approximately $50 million.

“Showering in home care is not currently considered part of clinical care, which means some people have to pay a co-payment and if they can’t afford it they will be denied help. The implications of this are significant.”

Labour’s new aged care laws came into force in November. The government is spending $4.3 billion on the Home Support program and has promised 83,000 additional places by the end of the financial year.

This month the federal government announced $115 million in new funding through the Aged Care Capital Assistance Program to increase access to residential aged care in selected hotspots including Adelaide, Illawarra, Perth and the Hunter.

Burton praised the extra funding for the aged care workforce and the increased presence of nurses in residential aged care settings.

Australia’s system faces a demographic time bomb, with the over-65 population doubling and the percentage of the population in the workforce falling.