Former Prime Minister Paul Keating proposes HECS-style system to cover aged care costs
Former Prime Minister Paul Keating has proposed a radical HECS-style scheme to help pay for the ballooning cost of aged care.
Mr Keating told the Royal Commission into Aged Care it would provide certainty for people in their final years.
"One hundred thousand people, in a county like this … do not have adequate support for home care," he said.
Former Prime Minister Paul Keating has proposed a HECS-style scheme to pay for aged care. 9News
Mr Keating's proposal would see the Commonwealth set up a HECS-style loan account that would pay for in-home aged care or residential care.
When the recipient dies, their estate would dedicate assets to pay off the loan.
"We're not forcing anyone out of their home in old age," he said.
"We're not obliging aged persons to negatively mortgage their home. You're not asking members of families to chip in."
And just as with HECS, the loan will only be repaid when a certain level of income is reached.
"If there are not assets there, then the Commonwealth pays," Mr Keating said.
Under the system, the cost of at-home care would be covered by the recipient's assets after their death. 9News
As Australia's population ages, the burden of paying for the services required by that older generation is falling on fewer and fewer younger working people.
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That younger generation is also saddled with their own HECS debts, rental homes, and lower incomes.
The danger of the proposed new system would include people selling off or hiding assets before their death.
Mr Keating denied it would be seen as a "death tax".
"It has one characteristic which is a positive one, and that is that the assets of the person maintain them in their later life," he said.
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