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New Aged Care Act: how your super could affect government support

Older Australians with unclaimed super should be aware of what the new Aged Care Act could mean for them

<p>Although many Australians have grown their super over decades for retirement, the new Aged Care Act could impact how you spend your well-earned money. [Source: Shutterstock]</p>

Although many Australians have grown their super over decades for retirement, the new Aged Care Act could impact how you spend your well-earned money. [Source: Shutterstock]

Key points:

  • The new Aged Care Act changes how aged care is funded and older Australians should be aware of what government contributions they can expect
  • Australian Taxation Office Deputy Commissioner Emma Rosenzweig said that the ATO is ‘holding $471 million’ on behalf of older Australians who are eligible to withdraw their superannuation funds
  • Older Australians may find the new changes and uncertainty related to the Aged Care Act stressful, but understanding more about super and your eligibility to withdraw is valuable

With the new Aged Care Act expected to transform the current aged care sector on July 1, 2025, older Australians may want to know how the changes could impact them and how this relates to assets such as superannuation, also referred to as ‘super.’ 

Superannuation is considered a financial asset, meaning older Australians with higher superannuation balances are more likely to receive a lower government contribution. As a result, older Australians with greater financial assets will be required to pay more for their aged care under the new Aged Care Act.

However, Australian Taxation Office Deputy Commissioner Emma Rosenzweig emphasised to older Australians that they may still need to access all of the superannuation they are entitled to.

“Even if you’ve retired, you could have lost or unclaimed super. The Australian Taxation Office is holding $471 million dollars on behalf of people aged 65 [and over],” she said.

“Superannuation is a key part of your retirement and we want to make sure Australians are claiming the investment they’ve worked for.

“If you’ve changed jobs, moved house or simply forgotten to update your details, you may have lost or unclaimed super.”

Older Australians who want to check if they have unclaimed superannuation funds or multiple accounts should:

  • visit the Australian Taxation Office website;
  • confirm their contact details;
  • check their super balances; and
  • consider combining accounts to consolidate their funds.

Older Australians who are approaching retirement but are not yet 65 years of age should be aware of possible scams that suggest super can be withdrawn and used before one typically becomes eligible. 

Some Australians can access it from the age of 55, depending on the year they were born. This is called the preservation age and more information on eligibility and birth years is available via the Australian Government’s MoneySmart website.

Additionally, eligible Australians can access their super before their preservation age due to compassionate reasons. Examples of early super-release reasons include needing to modify one’s home or vehicle due to severe disability and providing palliative care for a terminal illness. Read more about the eligibility criteria on the Australian Taxation Office website. 

To learn more about how to access your super in this Aged Care Guide article: Where can you access your super?

However, some older Australians may be concerned that if they withdraw their superannuation funds, all their money will be spent on aged care.

As Australia’s population continues to age and people live longer, there is ‘more scope for older people to contribute to their aged care costs by using their accumulated wealth than in previous generations,’ as per information in the final Aged Care Task Force report.

However, older Australians should be aware that when the new Aged Care Act comes into effect, no individual will ‘contribute more than $130,000 to their non-clinical care costs — whatever their means or duration of care — with every Support at Home contribution counted towards the cap.’

For example, for every dollar that a self-funded retired person in the Support at Home program — without a Commonwealth Seniors Health Card — contributes to their care costs, the government will contribute an average of $1.20 dollars.

Other older Australians without significant financial assets may be concerned about how they’ll fund their retirement and aged care. For more information about the new Support at Home funding, visit the Department of Health and Aged Care website.

The Aged Care Guide can provide advice about how to manage your super if you’re not yet withdrawing in this article: What to consider when choosing a super fund.

Are you an older Australian who isn’t sure if they’ve taken out all of their superannuation funds?

Let the team at Talking Aged Care know on social media. 

For more information and news in the aged care industry, subscribe to our free newsletter. 

 

Relevant content:

New Aged Care Act: what’s happening and when?

New Aged Care Act unveiled: what happened to make it happen?

At 69 years old, Mary Hanna was the oldest Olympian this year

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