Should aged care have its own HECS?

Australians don’t expect to pay for university before they study. So why do we expect older Australians to pay for care before they receive it?

That question was posed in different ways by two very different voices over the past fortnight.

At the Retirement Living Council’s National Summit in Brisbane, departing Uniting NSW.ACT CEO Tracey Burton suggested a HECS-style scheme that would allow older Australians to receive the care they need today and pay for it later.

As Tracey put it, people should be able to access care first, rather than being forced into financial decisions before they receive it.

Less than two weeks later, the newly released 71-page Home Truths report from the Policy Institute Australia arrived at a remarkably similar conclusion.

The independent think tank has proposed a Retirement Contribution Scheme (ReCS), modelled on HECS, that would allow older Australians to defer the cost of their retirement and aged care, repaying it later through their estate or when assets are eventually sold.

It’s not the first time the idea has surfaced. During the Royal Commission into Aged Care Quality and Safety, former Prime Minister Paul Keating proposed a similar HECS-style loan scheme that would allow older Australians to receive care upfront and repay the cost through their estate if they had the means to do so.

When the same idea continues to emerge from respected voices, it’s usually worth paying attention.

The next debate

For years, the sector has argued that Australia needs to spend more on aged care. It will. Demographics alone make that unavoidable.

But are we now asking the wrong question?

The new Aged Care Act has largely settled the question of whether people who can afford to contribute towards their care should do so. The principle of co-contribution is now embedded in legislation.

So, the debate is no longer whether consumers should contribute. The debate is how.

Changing the conversation

That’s where the HECS comparison becomes interesting.

HECS didn’t make university free. It made university accessible.

The scheme recognised that many Australians had the capacity to pay over their lifetime, just not at the moment they needed an education.

Aged care faces a remarkably similar challenge.

Many older Australians are asset rich but cash poor. They may own a home worth well over $1 million, yet struggle to fund home care, retirement living services or residential aged care without selling it.

A HECS-style approach changes the equation by removing the upfront financial barrier without pretending that care is free.

That shifts the conversation from who pays to when they pay.

Instead of debating how much more taxpayers should contribute, the discussion becomes how to finance care so people can access it when they actually need it, rather than when they can afford it.

This should be the next great funding debate in aged care.