Superannuation should be used to fund retirees’ aged care to take pressure off the Commonwealth’s coffers, a review has found, as the government rules out imposing a new tax to prop up the sector.

Older people are expected to be wealthier in retirement than their predecessors, largely due to the superannuation system.

Superannuation should be drawn upon to cover health and aged care costs given the purpose of the scheme is to help Australians save for retirement, the government-commissioned Aged Care Task Force report found. 

The proportion of people over 65 accessing the aged pension or other income support is expected to decline by 15 percentage points by the early 2060s.

Fewer people will receive the full pension rate due to increased superannuation and assets as well.

“Over the next 20 years, the number of people with superannuation balances at age 85 will grow considerably, with a greater proportion of people having significant funds available,” the report said.

A levy or tax to fund the aged care system was not recommended and has been ruled out by the government.

But the report called for the Commonwealth to continue taking a significant role in funding aged care services.

A strong safety net for people with low means to meet costs was also recommended.

The task force, chaired by minister Anika Wells, made 23 recommendations which are being considered by the government.

This post was originally published on Michael West.