Long-term care matters in a nation like Taiwan where the population is aging rapidly while birth rates remain low. However, even though the Long-Term Care Services Act (長期照護服務法) cleared the legislature earlier this year and is expected to take effect in 2018 at the earliest, it only provides a legal framework for the integration of care services, while the sources of funding remain unknown.
President-elect Tsai Ing-wen (蔡英文) — who has prioritized the implementation of long-term care after she takes office on May 20 — last month said she plans to allocate NT$30 billion (US$910.5 million) from taxes and NT$3 billion from the government’s regular budget to build a long-term care system. Based on her campaign platform, Tsai proposes to spend up to NT$60 billion backed by tax revenue over eight years to support the services.
However, many wonder if the amount will be sufficient.
Long-term care is expensive and a burden to both the government and the public. Presently, without government security, most people rely on their personal savings, pensions, investment gains or proceeds from the sale of a home as their major sources of funding for long-term care services.
However, when protracted, the higher costs of the services could seriously affect people’s quality of life and might lead to tragic consequences, which could damage social cohesion in the long run, as the slowing growth in population and a shrinking workforce threaten to increase the burden on younger generations to support retired workers and the disabled.
According to National Development Council statistics, about 12.2 percent of Taiwanese were 65 years old or older last year, and the figure is forecast to reach 14.6 percent in 2018 and climb further to 20.1 percent by 2025. About 5.91 working-age people support one senior citizen in Taiwan, but that number is expected to drop to about 3.4 in 2025 and 1.29 by 2050, government data showed. Moreover, the number of disabled people who need long-term care services has also increased in recent years, with the figure set to exceed 870,000 people in 2021, compared with 770,000 this year and 670,000 in 2011, according to government data.
In theory, there is a lot to like about Tsai’s planned long-term care system, which is to be funded mainly by revenue from specific taxes, such as the integrated house and land sales tax and the inheritance and gift tax, as, in theory, wealthier people pay more than others. However, some people doubt the sustainability of revenue from these taxes, saying that they negatively impact the business cycle and should not be turned into a major source of funding.
Instead, people have suggested tax hikes and other financing options, such as long-term care insurance, to help contribute to the funding. However, that would be easier said than done, because it would create a financial burden for the overall population and would require persistent communication with the legislature and the public.
Tsai’s determination to push forward the implementation of long-term care, which guarantees universal, plural and affordable services ranging from home-based and community-based care to facility-based assisted living and nursing homes, is welcome, especially as President Ma Ying-jeou’s (馬英九) administration failed to address the issue over the past eight years.
Still, the issues of sufficient and stable funding sources pose a major challenge for a nation where various pension systems are on the brink of collapse.
Those who require long-term care services only care if the government can guarantee revenue will be adequate to balance the system’s budget in the short term and maintain a consistent amount of revenue collected over time.
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