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HECS for aged care: Paul Keating’s solution to funding shortfall

Former prime minister Paul Keating says the ballooning cost of aged care should be met by a HECS-style funding model, where every Australian is extended a loan to pay for their care and the costs are recovered from each individual’s estate.

The model would reduce the fiscal burden on a generation that will already be carrying the costs of the coronavirus pandemic and allow easier access to home support packages, which currently have long waiting lists. Each person’s assets would help to maintain them in later life and it would be more difficult for family members to call on those assets.

“We’re not forcing anyone out of their home, we’re not obliging aged persons to negatively mortgage their home, you’re not asking families to chip in and pay for their relatives in their accommodation or their care, and so I think such a system has a lot of advantages,” Mr Keating said.

Former Prime Minister Paul Keating wants a HECS style loan system to be applied to the funding of aged care.

Former Prime Minister Paul Keating wants a HECS style loan system to be applied to the funding of aged care.Credit:Mal Fairclough

The scheme, which Mr Keating put to the Royal Commission into Aged Care Quality and Assurance on Monday morning, departs from his previous advocacy for a national insurance model funded by an employer directed levy, similar to the superannuation scheme that he designed as treasurer.

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