Young Australians are willing to sacrifice inheritance for this reason, survey finds

A new report released right before the federal budget is handed down has revealed young Australians are prepared to make one major sacrifice.

Nearly three quarters of Australians would sacrifice their inheritance so their parents and grandparents can spend the money on aged care instead, new research has found.

Australians are dying wealthier than ever and have gifted almost $1.4 trillion — or about $67bn a year — in inheritances over the past two decades, according to the report.

But new polling suggests most Millennials and members of Gen X would forgo this if it meant their older relatives could have better quality of life in their twilight years.

Of those who responded to the nationally-representative survey of 1000 people of all age groups, about half said they expected to receive an inheritance and 73 per cent said they’d be willing to miss out regardless.

A new poll has asked Australians if they would be willing to give up their inheritance. Picture: NCA NewsWire / Nicholas Eagar

Australian aged care software provider CompliSpace released the survey results on Tuesday along with a major report into aged care funding as the Albanese government puts the finishing touches on its first full federal budget.

The compliance and governance software maker’s chief executive officer, David Griffiths, has called for a “national conversation” about how aged care is funded and wants to revive the debate over increasing how much money people pay out-of-pocket for their own aged care.

“The inescapable fact is that Australia is experiencing an aged care funding crisis and is reaching a tipping point,” Mr Griffiths said.

“There are limits to how much taxpayers can provide to support older Australians who can fund their own care.”

The report argues co-contributions from aged care recipients would help the sector improve and expand its services and allow the government to direct funds towards subsidising the vulnerable older Australians who are most in need.

Treasurer Jim Chalmers will hand down the budget next week. Picture: NCA NewsWire / Dylan Coker

Mr Griffiths said it was no longer possible for taxpayers to fund the care of wealthy older Australians who could afford to pay for that care themselves.

“Co-contribution models are a way to both make that possible and to salvage aged care from becoming an unsustainable industry that fails older Australians,” he said.

The paper refers to research by the Productivity Commission which found the average Australian inheritance today is about $125,000, with the recipient about 50 years old, close to peak earning capacity and already established in a home they own.

Thirty-eight per cent of respondents to the CompliSpace survey agreed older people should sell their home if needed to fund their aged care.

Additionally, 47 per cent said they planned to leave an inheritance of their own despite supporting their relatives to spend their own money on aged care.

The report also sheds new light on the inheritances Australians give and receive.

Most people — 27 per cent of those surveyed — expect to receive between $50,000 and $250,000, with 5 per cent of people expecting an inheritance of between $1m and $2m.

NSW families bequeath the most wealth, with 19 per cent of respondents who had received an inheritance having assessed its value between $500,000 to $2m.

The report argues co-contributions from aged care recipients would help the sector improve its services.

Eighty per cent of South Australians who have benefited from an inheritance received it from their parents, by far the highest proportion in the country – and they are also the most likely to put their inheritance into superannuation.

Canberrans are the most likely to receive a cash inheritance — 61 per cent — and half of ACT respondents said they would leave their assets and savings to their partner.

In contrast, 42 per cent of Tasmanians said they would leave savings to their children whereas 28 per cent said they’d leave theirs to their partner.

Eighty-four per cent of Western Australians and 86 per cent of Tasmanians supported their parents and/or grandparents using savings to fund their retirements, making them the state-based cohorts most supportive of the idea.

Sixty-six per cent of Northern Territory residents and 69 per cent of Tasmanians expected that older people will fund their own aged care, more than in other jurisdictions.

Prime Minister Anthony Albanese made aged care reform one of his centrepiece election promises, using his reply speech to the Morrison government’s last federal budget in March 2022 to pledge an additional $2.5bn to fix the troubled sector.

Labor was recently forced to perform an about-face on part of this promise after conceding workforce shortages faced by some residential aged care homes meant it would miss its self-imposed deadline of July 1 to have a registered nurse on site at every facility 24/7.

Originally published as Young Australians are willing to sacrifice inheritance for this reason, survey finds