The Australian Government has a vested interested in enabling the seamless transfer of superannuation funds to aged care providers so that consumers can access services they need in a more timely manner, BaptistCare director, Peter Murphy says.
The former chief executive of Christian Super penned an opinion piece for Investment Magazine this week, in which he highlighted that amidst all the complexities of aged care funding and regulation, one of the biggest issues affecting anyone needing residential care is the upfront fee.
“Within all the complexities, a major issue that directly affects those entering aged care facilities is the upfront fee. The average accommodation price agreed upon for a new resident in the last financial year was a refundable deposit of about $370,000, with about 80 per cent requiring some form of lump sum,” Mr Murphy said.
“For some, this will be funded through the sale of their home, or the return of a bond from a retirement village; for others, it will require accessing funds from the superannuation system.”
“At present, there is no simple way of doing this – even though it will be increasingly necessary for many people. We need to create a seamless way of transferring significant portions of member balances from the superannuation system to the aged care sector.”
Mr Murphy, who is a senior consultant for boutique business advisory firm Robertson & Chang, said the rise in the number of intermediary agents such as aged care placement services in recent years has added further costs to consumers, further compounding financial strain at a difficult time.
One solution he said is to consider the expansion of the national payments platform or a refinement of the SuperStream legislation to allow the aged care sector to intersect with the superannuation system.
“Over the past few years, the superannuation system has made it possible to transfer account balances between funds in a more efficient manner,” he said.
“Why not take the next logical step and extend that efficiency to the transfer of funds between superannuation and aged care? Streamlining the process would reduce some of the financial and time pressure on members and their families at what is often an emotionally challenging time.”
He said with aged care costs to Government expected to rise by $1 billion per year, the Government has a vested interest in making the system run as efficiently as possible.
Source: Investment Magazine