The Actuaries Institute has launched its latest Green Paper, titled Aged Care Funding: Assessing the Options and Implications. The Green Paper, commissioned by the Institute and written by actuaries Gillian Harrex, Andrew Matthews, Hadyn Bernau and Kylie Hogan, calls for a considered conversation about funding of the Aged Care system.
The Institute projects Aged Care costs will increase 7% pa over the next 20 years, likely the fastest-growing line item in the Commonwealth budget and well above that projected in the Intergenerational Report, as Baby Boomers move into extreme old age.
The Green Paper finds a potential challenge in Commonwealth Government funding at 2040/41 with a shortfall of about $9 billion in 2020/21 dollars (nearly 0.4% of GDP), notwithstanding the significant additional funding announced this year.
“Our research indicates that the cost and funding pressures at government and society levels will be significantly greater than currently projected and that these will be most acute over the coming 20 years due to the safety nets and projected demographic, social, and health trends,” the paper said.