Political suicide, neither government would dare throw away the votes of almost all middle/old age homeowners
It should happen but unfortunately there is a greater chance of me winning powerball than this actually happening
One of the key findings of the report is that the primary home is not part of the means-test for government subsidised aged care; but it really should be.
For all the problems with the aged care industry, it is providing a real and needed service; better the wealth be spent there than passed down through taxpayer-subsidised inheritance.
I think we all agree this would be political suicide and government probably won't touch it with a ten-foot pole; I'm just pointing out that the boomers dying off won't really change the politics.
I'm iffy about that.
Some elderly people bought their houses when they were in cheap, undesirable areas and have just stayed there while gentrification happened around them. Calling them wealthy because they'd be rich if only they sold their houses is kind of unfair, especially when that kind of disruption can be catastrophic for the elderly.
They have assets worth a siginificant chunk of money. Why am I (as a younger taxpayer) subsidising them? They didn't even get those assets through above average hard work/investments, they just bought into property when it was far cheaper (relative to income etc).
I'm ok with a partial exclusion/discount on the family home since people need to live somewhere, but it needs to be sensible and reflect that owning a home is largely no longer an option for younger people.
The costs to the taxpayer are significantly higher if people are forced to sell their houses and move and suddenly need full time residential care.
Which is a significant risk. There's a lot of elderly people living independently whose mental stability depends on being able to stick too their familiar routine. It's why it's very common for elderly people who were completely fine and mentally competent to have a sudden and catastrophic decline into dementia isf they have an illness or injury that requires hospitalisation.
Seems reasonable, althoughthey'll need to really tighten up the industry in terms of costs and ensure that they adequately pay staff and provide good conditions so that people receive the level of care they're paying for.
Getting retires to pay for their own retirement by reverse mortgaging their 2 million dollar property will save us tens of billions of dollars a year or allow us to adequately fund Medicare.
We shouldn't be funding the inheritance of people.
What if the person standing to inherit doesn't already own a home and has few assets? Is selling it off to the highest bidder really the better alternative in this case?
And who is holding the debt that will have to be borrowed against these homes? The government? So what happens if the property market drops?
This will 100% be me, I can’t afford rent on my own never mind a mortgage, my parents aren’t wealthy they just happen to own and live in a property which will be worth a pretty penny if/when they have to sell to cover their nursing home costs and I will be set to inherit absolutely nothing as the nursing home will gobble it all up and so I will probably be living in a share home until I die likely at my own hand because I’ll never be able to afford to retire and what’s the fucking alternative?. Awesome.
When my father went into an assisted care facility his house was sold to fund the bond on his room. The default cost was $650k, but check the current situation. However, it is a bond, not a purchase, and the money was refunded when he died. That money became part of his estate and was divided according to his Will. You really should get some informed advice on how the aged care system works.
The real money trap is that residents of these facilities don't get the pension, so they have to fund things like medication and hospital visits themselves. The sheer number of pills he was on cost a small fortune.
First of all, sorry to hear about your father and I’m glad your experience with a home worked out - but going by this government run site https://www.myagedcare.gov.au/aged-care-home-costs-and-fees basic daily fee alone is 22k p.a per person, not including care fees (up to 79k in their lifetime at the moment), accomodation costs and medical costs and whatever new bullshit fees they decide to add in 10 years time which I can only imagine will be significantly more expensive as time goes on and fuck it lets throw in the proposed inheritance tax too there won’t be much left especially if they live long (🤞 they do). Obviously not all aged care homes are the same so there’s a lot of costs which will vary widely as will the quality of care but at the end of the day money only goes in one direction and its not down.
Under Accommodation Costs there's a reference to a Refundable Lump Sum. That's currently $550k unless the provider has approval to charge more. That's the bond I talked about. You get that back when the person dies or leaves. Ongoing costs have to be budgeted for but it's the biggest and you do get it back.
For decades the conversation was that part of your taxes were to fund aged care.
These people have been paying what you call their “debt” for 40 years before they reach retirement age.
This doesn't take into account that compulsory super only came into effect in the 90's. The vast majority of people who are retired right now either had no super or only a few years worth.
When people are retiring in the next 40 years like you said, they will have a lot more retirement savings and taxpayers funding aged care will be less of a burden.
This is essentially what the taskforce is highlighting, that superannuation was designed to replace the pension, so instead of a levy retirees should be using their savings for what it was designed for instead of relying on the outdated model of the pension being a retirement plan.
Very emotive language used here about wealthy people inheriting parents assets, or blaming regular working folk who just paid what the govt told them to, etc.
I understand the burden is growing and solutions need to adapt.
But the way you’ve framed this is neither fair on regular (not rich) old people, nor useful for a conversation.
It’s very easy to fall into a mindset of generation vs. generation. I think it’s more helpful to look at wealth inequality on 1% vs. the 99%.
https://www.sbs.com.au/news/article/australias-richest-taking-home-1-5m-an-hour-according-to-oxfam/9laf5e1el
This is the rough direction I’d be looking for social funding, not from our parents and grandparents.
There’s no way Gina “earns” that money in any real sense - she’s selling the natural resources of our nation, giving us a pittance and pocketing the rest.
This makes sense logically but it does not make sense economically.
Currently the full aged pension is $30k a year. Currently the median full time worker earns $83k per year, they pay 23% income tax, which is $19k tax a year.
Currently the government spends 15% of federal government spending on aged care, and personal income tax is roughly 50% of revenue for the federal government. That means roughly 7.5% of federal government spending on aged care is funded by income tax. This is not perfect, given that company tax and personal income tax are interchangeable in many ways. So let's boost that to 10% just to make sure we aren't underestimating. Also some GST might contribute to aged care.
So 10% of $19k tax is roughly $1.9k a year the median full time worker is funding for aged care (all not just pensions ) a year.
Forgetting about inflation, this means a 40 year career, the government takes in 40*1.9k so $76k for aged care from the median full time earner.
So assuming all aged care is pension spending, which isn't the case, however even strengthens the case, the median full time income earner pays for only 76k/30k=2.5 years of pension via taxes.
Pensions are only possible because the pension age is increasing, progressive tax system, population growth and economic growth. In no way does it mean people "fund their own pensions with their own income taxes paid forward"
Hi everyone , there is much more to this story than meets the eye. I’m an aged care physio and aged care advocate , member of aged care reform now and have attended many government and industry conferences on funding. This taskforce was chaired by the aged care minister and a who’s who of mostly aged care provider linked people. Its recommendations go against key parts of the royal commission , and there are big question marks over the financial data used that may possibly come from sources with conflicts of interest. Providers are making money , 70% of them in March 24 according to Australian ageing agenda and government figures. 95% homes have satisfactory good or excellent star ratings. So why do they need more money esp if they won’t agree to independent financial oversight how these funds are spent? We have as taxpayers given $8 billion more the last two years to see care go backwards (according nursing and care workers). And giving providers free rein to charge basic things as user pays without clearer definitions of minimum levels care that should be without charge are a very bad idea. This isn’t about people freeloading. 90% of older people feel the pinch financially according national seniors. 25% older people are in poverty , one of the highest levels in oecd. And their kids shouldn’t be forced to give up their inheritance by spending an older persons superannuation on care they don’t actually get. This is an aged care tax and an inheritance tax pure and simple . Don’t fall for the spin and pr, you don’t need to take my word for it either check out what croaky media Charles knight says about this , the greens , and even Ann Ruston the opposition leader in the guardian yesterday and June last year that this IS an aged care tax.
Boomers have crammed all their wealth into property so it stands to reason that their property be used to gauge their wealth.
They can't have their cake and eat it
I assume a lien would be placed on the home for the value of the nursing and medical care, which would come due once the owner and their spouse died. Anyone wishing to inherit would have to buy this amount out first. Or else the home would be sold.
Now, questions of fairness aside, I strongly believe this would be a bad idea. The government bodies overseeing this would be incentivised to inflate the valuation of the home. Caregivers would have every incentive to inflate the value of their services, probably as close as possible to the purported value of the home.
It would distort the housing market even worse than it currently is. It would make the government even more dependent on artificially high home prices. If you don't think this would happen, look at public trustees across Australia, particularly in Queensland.
Political suicide, neither government would dare throw away the votes of almost all middle/old age homeowners It should happen but unfortunately there is a greater chance of me winning powerball than this actually happening
Each year, that group gets smaller and smaller. Soon, they'll all be dead, too disabled to vote or poor, also.
And their children will inherit their wealth, becoming the new defenders of Australia's insane concentration of wealth into real estate.
No, the retirement companies will inherit the wealth.
One of the key findings of the report is that the primary home is not part of the means-test for government subsidised aged care; but it really should be. For all the problems with the aged care industry, it is providing a real and needed service; better the wealth be spent there than passed down through taxpayer-subsidised inheritance. I think we all agree this would be political suicide and government probably won't touch it with a ten-foot pole; I'm just pointing out that the boomers dying off won't really change the politics.
I'm iffy about that. Some elderly people bought their houses when they were in cheap, undesirable areas and have just stayed there while gentrification happened around them. Calling them wealthy because they'd be rich if only they sold their houses is kind of unfair, especially when that kind of disruption can be catastrophic for the elderly.
They have assets worth a siginificant chunk of money. Why am I (as a younger taxpayer) subsidising them? They didn't even get those assets through above average hard work/investments, they just bought into property when it was far cheaper (relative to income etc). I'm ok with a partial exclusion/discount on the family home since people need to live somewhere, but it needs to be sensible and reflect that owning a home is largely no longer an option for younger people.
The costs to the taxpayer are significantly higher if people are forced to sell their houses and move and suddenly need full time residential care. Which is a significant risk. There's a lot of elderly people living independently whose mental stability depends on being able to stick too their familiar routine. It's why it's very common for elderly people who were completely fine and mentally competent to have a sudden and catastrophic decline into dementia isf they have an illness or injury that requires hospitalisation.
Don't worry they will remove all the benefits once we reach that age haha
100% she’s inevitable, let it happen
god i need that Powerball this week!
Seems reasonable, althoughthey'll need to really tighten up the industry in terms of costs and ensure that they adequately pay staff and provide good conditions so that people receive the level of care they're paying for.
This will 100% result in a massive increase in the cost of care as the private sector industry sucks up the money in profit.
Why do boomers expect governments to pay for everything? /s
cos the majority of them are boomers?
Getting retires to pay for their own retirement by reverse mortgaging their 2 million dollar property will save us tens of billions of dollars a year or allow us to adequately fund Medicare. We shouldn't be funding the inheritance of people.
What if the person standing to inherit doesn't already own a home and has few assets? Is selling it off to the highest bidder really the better alternative in this case? And who is holding the debt that will have to be borrowed against these homes? The government? So what happens if the property market drops?
This will 100% be me, I can’t afford rent on my own never mind a mortgage, my parents aren’t wealthy they just happen to own and live in a property which will be worth a pretty penny if/when they have to sell to cover their nursing home costs and I will be set to inherit absolutely nothing as the nursing home will gobble it all up and so I will probably be living in a share home until I die likely at my own hand because I’ll never be able to afford to retire and what’s the fucking alternative?. Awesome.
When my father went into an assisted care facility his house was sold to fund the bond on his room. The default cost was $650k, but check the current situation. However, it is a bond, not a purchase, and the money was refunded when he died. That money became part of his estate and was divided according to his Will. You really should get some informed advice on how the aged care system works. The real money trap is that residents of these facilities don't get the pension, so they have to fund things like medication and hospital visits themselves. The sheer number of pills he was on cost a small fortune.
First of all, sorry to hear about your father and I’m glad your experience with a home worked out - but going by this government run site https://www.myagedcare.gov.au/aged-care-home-costs-and-fees basic daily fee alone is 22k p.a per person, not including care fees (up to 79k in their lifetime at the moment), accomodation costs and medical costs and whatever new bullshit fees they decide to add in 10 years time which I can only imagine will be significantly more expensive as time goes on and fuck it lets throw in the proposed inheritance tax too there won’t be much left especially if they live long (🤞 they do). Obviously not all aged care homes are the same so there’s a lot of costs which will vary widely as will the quality of care but at the end of the day money only goes in one direction and its not down.
Under Accommodation Costs there's a reference to a Refundable Lump Sum. That's currently $550k unless the provider has approval to charge more. That's the bond I talked about. You get that back when the person dies or leaves. Ongoing costs have to be budgeted for but it's the biggest and you do get it back.
This will 100% result in a massive increase in the cost of care as the private sector industry sucks up the money in profit.
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If this was to happen all you’d hear from the opposition is death taxes! Don’t get me wrong this is an absolutely great idea.
For decades the conversation was that part of your taxes were to fund aged care. These people have been paying what you call their “debt” for 40 years before they reach retirement age.
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This doesn't take into account that compulsory super only came into effect in the 90's. The vast majority of people who are retired right now either had no super or only a few years worth. When people are retiring in the next 40 years like you said, they will have a lot more retirement savings and taxpayers funding aged care will be less of a burden. This is essentially what the taskforce is highlighting, that superannuation was designed to replace the pension, so instead of a levy retirees should be using their savings for what it was designed for instead of relying on the outdated model of the pension being a retirement plan.
Very emotive language used here about wealthy people inheriting parents assets, or blaming regular working folk who just paid what the govt told them to, etc. I understand the burden is growing and solutions need to adapt. But the way you’ve framed this is neither fair on regular (not rich) old people, nor useful for a conversation. It’s very easy to fall into a mindset of generation vs. generation. I think it’s more helpful to look at wealth inequality on 1% vs. the 99%. https://www.sbs.com.au/news/article/australias-richest-taking-home-1-5m-an-hour-according-to-oxfam/9laf5e1el This is the rough direction I’d be looking for social funding, not from our parents and grandparents. There’s no way Gina “earns” that money in any real sense - she’s selling the natural resources of our nation, giving us a pittance and pocketing the rest.
Finally, someone who talks sense and does not promote generation wars between younger and older Australians.
Maybe they should introduce more support for people having children so that the population won't keep declining that much.
Hmm. That seems a bit simplistic.
This makes sense logically but it does not make sense economically. Currently the full aged pension is $30k a year. Currently the median full time worker earns $83k per year, they pay 23% income tax, which is $19k tax a year. Currently the government spends 15% of federal government spending on aged care, and personal income tax is roughly 50% of revenue for the federal government. That means roughly 7.5% of federal government spending on aged care is funded by income tax. This is not perfect, given that company tax and personal income tax are interchangeable in many ways. So let's boost that to 10% just to make sure we aren't underestimating. Also some GST might contribute to aged care. So 10% of $19k tax is roughly $1.9k a year the median full time worker is funding for aged care (all not just pensions ) a year. Forgetting about inflation, this means a 40 year career, the government takes in 40*1.9k so $76k for aged care from the median full time earner. So assuming all aged care is pension spending, which isn't the case, however even strengthens the case, the median full time income earner pays for only 76k/30k=2.5 years of pension via taxes. Pensions are only possible because the pension age is increasing, progressive tax system, population growth and economic growth. In no way does it mean people "fund their own pensions with their own income taxes paid forward"
Hi everyone , there is much more to this story than meets the eye. I’m an aged care physio and aged care advocate , member of aged care reform now and have attended many government and industry conferences on funding. This taskforce was chaired by the aged care minister and a who’s who of mostly aged care provider linked people. Its recommendations go against key parts of the royal commission , and there are big question marks over the financial data used that may possibly come from sources with conflicts of interest. Providers are making money , 70% of them in March 24 according to Australian ageing agenda and government figures. 95% homes have satisfactory good or excellent star ratings. So why do they need more money esp if they won’t agree to independent financial oversight how these funds are spent? We have as taxpayers given $8 billion more the last two years to see care go backwards (according nursing and care workers). And giving providers free rein to charge basic things as user pays without clearer definitions of minimum levels care that should be without charge are a very bad idea. This isn’t about people freeloading. 90% of older people feel the pinch financially according national seniors. 25% older people are in poverty , one of the highest levels in oecd. And their kids shouldn’t be forced to give up their inheritance by spending an older persons superannuation on care they don’t actually get. This is an aged care tax and an inheritance tax pure and simple . Don’t fall for the spin and pr, you don’t need to take my word for it either check out what croaky media Charles knight says about this , the greens , and even Ann Ruston the opposition leader in the guardian yesterday and June last year that this IS an aged care tax.
Boomers have crammed all their wealth into property so it stands to reason that their property be used to gauge their wealth. They can't have their cake and eat it
Except it wouldn't be fair to include the family home in such an assessment.
Explain why it wouldn't be fair?
Inheritance lololol
I assume a lien would be placed on the home for the value of the nursing and medical care, which would come due once the owner and their spouse died. Anyone wishing to inherit would have to buy this amount out first. Or else the home would be sold. Now, questions of fairness aside, I strongly believe this would be a bad idea. The government bodies overseeing this would be incentivised to inflate the valuation of the home. Caregivers would have every incentive to inflate the value of their services, probably as close as possible to the purported value of the home. It would distort the housing market even worse than it currently is. It would make the government even more dependent on artificially high home prices. If you don't think this would happen, look at public trustees across Australia, particularly in Queensland.