Governance Challenges of a Super-Aged Society: Fiscal Sustainability of Long-Term Care 3.0 and Policy Solutions for the Care Workforce Gap

In 2025, Taiwan's population aged 65 and above exceeded 20% of the total population, officially entering the category of a "super-aged society." This is not merely a demographic milestone but a comprehensive stress test of national governance capacity. When one in every five people is elderly, the systems of healthcare, caregiving, public finance, and labor force structure will all be compelled to undergo fundamental reorganization. Long-Term Care 3.0, guided by the vision of "healthy aging, aging in place, and dignified end-of-life care," has committed over NT$100 billion in budgetary allocation. Yet the deeper structural issues embedded in the system's design — fiscal sustainability, the workforce gap, and the urban-rural divide — continue to test the wisdom of policymakers.

I. The Policy Architecture of Long-Term Care 3.0: From Quantitative Expansion to Qualitative Transformation

Since the implementation of Long-Term Care 2.0 in 2017, service coverage has risen from 15.4% to nearly 40% in 2024, with the number of beneficiaries exceeding 600,000. However, as the disabled population is projected to surpass 1.2 million by 2030, quantitative expansion has reached the institutional ceiling. The core transformation of Long-Term Care 3.0 operates along three dimensions: first, shifting from "reactive caregiving" to "preventive delay," incorporating healthy aging into the front end of the system; second, shifting from "institution-centered" to "community-integrated" care, strengthening the infrastructure for aging in place; and third, shifting from "government-funded" to "diversified financing," introducing social insurance and market mechanisms.^[1]

However, all three transformations face severe implementation gaps. Community-based preventive care stations cover only 40% of rural areas; the inter-ministerial coordination mechanism for community-integrated care (spanning the Ministry of Health and Welfare, Ministry of the Interior, and Ministry of Transportation) remains fragmented and siloed; and discussions on diversified financing have stalled due to political sensitivity — the draft Long-Term Care Insurance Act has languished in the Legislature for over five years.

II. The Structural Challenge of Fiscal Sustainability

The funding for Long-Term Care 3.0 relies primarily on tobacco surcharges, the consolidated housing and land tax, and estate and gift taxes, with the 2026 fiscal year budget reaching NT$81.1 billion. The problem is that these revenue sources are inherently "opportunistic" — tobacco surcharges shrink as smoking rates decline, and the consolidated housing and land tax is highly sensitive to real estate market fluctuations. According to the National Development Council's projections, if the current level of services is maintained, long-term care expenditure demands will exceed NT$150 billion by 2030, representing a 40% funding gap under existing revenue structures.^[2]

Japan's Long-Term Care Insurance (Kaigo Hoken) system, implemented in 2000, requires mandatory premium contributions from all citizens aged 40 and above, supplemented by government subsidies and user co-payments (10–30%), establishing a relatively stable triangular financing structure. Germany's Long-Term Care Insurance (Pflegeversicherung) adopts a social insurance model with premiums split equally between employers and employees. The shared lesson from both systems is clear: a tax-funded long-term care system is inherently unsustainable under conditions of rapid population aging, and the establishment of a social insurance framework is a political decision that must eventually be confronted.^[3]

III. The Care Workforce Gap: An Overlooked Systemic Crisis

Taiwan currently has approximately 120,000 long-term care workers, but the Ministry of Health and Welfare projects that demand will reach over 160,000 by 2030, leaving a gap of nearly 40,000. Even more critical is the structural dimension: the average age of care workers is 52, the turnover rate exceeds 25%, and the median salary is only NT$32,000. This is not simply a matter of "not enough people" — it reflects a systemic failure of occupational attractiveness.

International experience points to three pathways forward. First, the professionalization pathway — Japan's Certified Care Worker (Kaigo Fukushishi) system has established a career ladder from entry-level to advanced positions, accompanied by national certification examinations and corresponding salary bands. Second, the technology-assisted pathway — Nordic countries have extensively deployed care robots, remote health monitoring, and AI-powered scheduling systems, freeing human workers from repetitive manual tasks. Third, the migrant worker reform pathway — Singapore's Foreign Domestic Workers system, combined with training certification and employer liability insurance, has built the largest care workforce market in Asia. Taiwan needs to pursue all three approaches simultaneously, rather than relying solely on the single channel of family-employed foreign caregivers.^[4]

IV. The Silver Economy: Opportunities and the Governance Framework

A super-aged society is not solely a burden; it also presents opportunities. The global silver economy is projected to reach USD 27 trillion by 2030. Taiwan possesses an industrial foundation in smart healthcare, assistive technology, and health management. The critical question is whether the country can construct a governance framework that supports innovation.

Six specific policy directions are recommended:

1. Initiate Long-Term Care Insurance legislation — Modeled on Japan's Kaigo Hoken, establish a triangular financing structure with mandatory enrollment for those aged 40 and above, 50% government subsidies, and 10–20% user co-payments.
2. Establish a career ladder for care workers — Drawing on Japan's Certified Care Worker system, create entry-level, intermediate, and advanced certifications with salary differentials of at least 30%.
3. Create a silver technology regulatory sandbox — Develop accelerated review and field-testing mechanisms for care robots, telemedicine, and AI-powered health management.
4. Strengthen the inter-ministerial mechanism for community-integrated care — Establish a "Super-Aged Society Policy Coordination Office" at the Executive Yuan level, integrating resources from the Ministry of Health and Welfare, Ministry of the Interior, Ministry of Transportation, and Ministry of Labor.
5. Reform the migrant care worker system — Shift from "family-based hiring" to "agency-based dispatch," coupled with training certification and labor rights protections, to improve care quality and workforce stability.
6. Develop preventive medicine coverage under the National Health Insurance — Incorporate community health promotion, strength training, and cognitive stimulation programs into preventive care benefits to delay disability at the source.

The arrival of a super-aged society is irreversible. Whether it becomes a governance catastrophe or a transformative opportunity depends on the institutional choices made today. As the World Health Organization stated in its World Report on Ageing and Health: aging itself is not the problem — the lack of preparedness is.^[5]