Australians prioritise aged care over inheritance, a new report has found
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The 2023 CompliSpace Towards the Tipping Point in Aged Care has found that Australians would rather sacrifice their inheritance than have their parents and grandparents go without proper care in retirement.
A recent report published by CompliSpace suggests that Australians are willing to sacrifice their own inheritance to support the retirement of their parents and grandparents.
This finding marks a significant shift in who Australians believe should pay for aged care, as almost three-quarters of Australians (73%) agree that their elderly relatives should spend their hard-earned savings on their own care rather than passing it on to their Generation X children or Millennial grandchildren.
CompliSpace CEO David Griffiths said the research confirms, for the first time, that Australians want their parents and grandparents to spend their savings on themselves. He suggests that older Australians are being given the green light by their own families to spend their savings on their own care rather than compromising their quality of life.
The report highlights that Australia spends about $30 billion per annum on aged care, only half of what comparable countries do, creating a $30 billion funding shortfall yearly.
According to the Productivity Commission, the average recipient of an inheritance receives about $125,000, is about 50 years old, close to peak earning capacity and established in a house. The Federal Government’s 2020 Retirement Income Review Report found that “most people die with the bulk of the wealth they had at retirement intact.”
As pressure on the aged care system is likely to grow as Australia’s population ages rapidly, the Aged Care Financing Authority (ACFA) has found that a sustainable aged care system can only be achieved with more co-contributions from older Australians who can afford to make them.
The Australian Government currently pays for two-thirds of aged care services in Australia, with co-contributions from older Australians making up the remainder. In 2020-2021 the federal government spent $23.6 billion on aged care.
Griffiths noted that it is no longer possible for taxpayers to fund the care of wealthy older Australians who can afford to pay for that care themselves. He suggests that it is time to empower Australians to make decisions about their own retirement and co-contribution models are a way to both make that possible and to salvage aged care from becoming an unsustainable industry that fails older Australians.
Key findings were also highlighted on what Australians believe and expect regarding inheritance and aged care, such as almost half of all Australians (47%) intend to leave an inheritance, mostly to a spouse or partner (36%), children (28%) or other family members (19%).
Furthermore, the report provides state-by-state comparison insights, indicating that New South Wales residents are the “windfall winners” – NSW families bequeath the most wealth, and most South Australians (80%) who have benefitted from an inheritance received it from their parents, by far the highest proportion in the country – and they are also the most likely to put their inheritance into a superannuation (10%). Canberrans are the most likely to receive a cash inheritance (61%).
Ritchelle is a Content Producer for Healthcare Channel, Australia’s premier resource of information for healthcare.
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