The government should encourage wealthier Australians to spend more of their superannuation on care, with the aim of freeing up capacity in the system to better support those without financial means. The proposal comes as pressure on the aged care sector continues to grow. This is driven by an ageing population and increasing demand for aged care services. At the same time, concerns are mounting about how the system will be funded in the years ahead. This comes as more Australians live longer and require more complex care.
So, why is this becoming a growing issue?
Why there’s a push for higher-income individuals to contribute more to aged care
With limits on government funding for aged care, there is growing discussion about the role higher-income individuals may play in contributing more towards their own care.
Tracey Burton is the CEO of Uniting NSW and ACT. The organisation manages 70 aged care facilities, 90 retirement villages and provides home care services.
She argues that a culture shift is needed about the role of superannuation.
“This idea that superannuation is intergenerational and for passing on to your kids. It’s not. It is there to help you have the best retirement you can have, so spend it on what you need, and if that’s the aged care system, then spend it there.”
This debate is particularly relevant as more Australians are entering retirement with higher superannuation balances than previous generations.
In 2024, the government’s aged care taskforce recommended that wealthier Australians should pay more for aged care. It found that more people aged 85 will still have savings over the next two decades. This includes some with significant funds available for aged care.
How savings could support those who cannot afford care
For many older Australians, even basic aged care services can come with out-of-pocket costs that are difficult to manage on a fixed income. This can include everyday support such as personal care, transport and respite services. As a result, some people may delay accessing the care they need or rely more heavily on family support. Directing additional funding towards those without financial means could improve access to essential services. It may also reduce pressure on families and the broader healthcare system. This could also help ensure that care is delivered based on need, rather than an individual’s ability to pay.
“Showering in home care is not considered part of care clinical care at the moment, which means that some people have to pay a co-contribution, and if they can’t afford that, they’ll miss out on the assistance. The consequences of that are significant,” said Burton.
Uniting believes the government should exempt full pensioners from rules requiring co-payments. It’s estimated that this change would cost about $50m a year.
As debate continues around how aged care should be funded, providers will remain under pressure to deliver quality services in a financially sustainable way. This will place even greater importance on skilled aged care workers who can support older Australians with professionalism, compassion and efficiency, particularly as demand for services continues to increase.
For jobseekers, it also reinforces the value of presenting their experience clearly when applying for roles in this growing and evolving sector, where employers are seeking candidates who can adapt to changing care needs.
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Article References
McIlroy, T (22 March 2026) ‘Superannuation should be used for aged care, not inherited by next generation, aged care CEO says’, The Guardian, accessed 23 March 2026.