Taxpayers fork out as aged care bosses cry poor


Workers face a new aged care tax as high as 8.2 per cent, as nursing home operators cry poor despite paying their executives more than Prime Minister Scott Morrison.

The Royal Commission into Aged Care Quality and Safety is pushing for a new Medicare-style levy for aged care, ranging from a flat 1 per cent for all workers to 8.2 per cent for high-income taxpayers over the age of 40 - on top of the existing 2 per cent Medicare levy.

Aged care operators are demanding extra taxpayer funding, despite paying their executives up to $1 million a year.

Japara Healthcare Ltd, which runs 51 nursing homes, paid founder Andrew Sudholz $1,024,000 in 2018/19 and his replacement, new chief executive officer Chris Price, $730,000 last financial year.


Workers on the minimum wage would be slugged 2.1 per cent of their income through a new aged care tax - rising to 3.5 per cent for the over-40s - under radical proposals by Royal Commissioner Tony Pagone QC.

Average wage earners would pay 3.6 per cent of their salary towards aged care, rising to 5.9 per cent for the over-40s.

High income earners earning more than $180,000 a year would pay an 8.2 per cent levy if they are over 40, or 5 per cent if they are younger.



Fellow Commissioner Lynelle Briggs has proposed a flat 1 per cent aged care tax for all workers.

Federal Minister for Aged Care Services Richard Colbeck said the government was having an "open discussion'' about an aged care tax to improve a system blighted by short-staffing, abuse and neglect.

Japara Healthcare Ltd paid CEO Chris Price Chief $730,000 last financial year.
Japara Healthcare Ltd paid CEO Chris Price Chief $730,000 last financial year.

Mr Colbeck said aged care "will require considerable additional resources', on top of the $20 billion in taxpayer funding this year and $452 million in patch-up funding announced on Monday.

"We will consider all of the recommendations carefully, we will have a comprehensive response to those in the (May) budget,'' he said.

A spokesman for Mr Morrison refused to comment on the levy on Tuesday but on Monday Mr Morrison said he was "a little wary at this point."

"We'll consider those things," he said.

"You know of our government's disposition when it comes to increased levies and taxes, it's not something we lean into," the Prime Minister said.

The push for an aged care tax follows the Royal Commission's harrowing evidence of "sad and confronting'' abuse and neglect affecting one in three nursing home residents - including bashings, rapes, malnutrition, untreated wounds and elderly Australians left to sit in their own faeces in short-staffed nursing homes.

Prime Minister Scott Morrison. Picture: NCA NewsWire / Gary Ramage
Prime Minister Scott Morrison. Picture: NCA NewsWire / Gary Ramage

The Royal Commission has recommended more and better-trained staff, including at least one nurse in every nursing home, but the aged care industry wants more taxpayer funding.

Commissioner Briggs has proposed an "aged care improvement levy'' of 1 per cent to start on 1 July 2023, that would cost a worker on the minimum wage $392 a year and a worker earning $180,000 an extra $1800 a year.

But Commissioner Pagone has proposed a more complex levy, with a higher rate for the over-40s, in return for abolishing means testing and most user-pays fees and accommodation bonds for aged care residents.

He said a flat levy would require all Australian workers to pay 2.61 per cent of their income towards aged care - more than the Medicare levy for health.

Under his plan for a sliding scale of taxes based on income, an over-40 worker on the minimum wage would pay $1371 and a worker earning $180,000 would be slugged $15,840 a year.

"People should contribute to financing the aged care system in accordance with their income over their entire lives,'' he wrote in the Royal Commission's eight-volume report.

"… the more financially fortunate should continue to pay a greater share.''

Commissioner Briggs, a former Australian Public Service Commissioner, wrote that taxpayers would support the new aged care tax.

"Australians are a generous people who will willingly contribute to improvements to the aged care system if they are convinced that the funds will be well directed,'' Ms Briggs said.

"But they will want to see how their taxes are being used.''

Australian Nursing and Midwifery Federation (ANMF) federal secretary Annie Butler said yesterday a Medicare-style levy "is worthy of consideration''.

Originally published as Taxpayers fork out as aged care bosses cry poor