Former treasurer Peter Costello has criticised the complexity of aged care paperwork and has no idea how someone going into a nursing home could be expected to fill it out.
The federal government uses income or assets tests to determine how much people pay for residential aged care or home services.
Mr Costello, Australia's longest-serving treasurer, said he tried to complete the forms with his family.
"I think I'm reasonably financially literate. I had a lot of trouble filling it in," he told royal commission hearings examining the sector on Wednesday.
"I don't know how a person going into a nursing home would ever be able to fill it in."
The seven-day hearing is examining how to best fund aged care as demand increases.
Mr Costello said he believes in having an assets and income test, but the current paperwork included more than 100 questions across 27 pages.
"This is extremely complex. You can sit down and you can devise the best income and assets test in theory, but can I just urge you, you have got to administer it," he said.
Former treasury secretary Ken Henry described entering the aged system as "bewildering" and warned of a baby-boomer bulge moving into care from 2030.
"(The system) is horribly complex and it contains a very high level of uncertainty for people," he said.
"People who are elderly, people who are vulnerable, people who are suffering emotional and psychological stress.
"This system is unsustainable, underfunded, under resourced and it will not be tolerated, in particular... by the baby boomers themselves when they find themselves in this system."
Mr Henry said there was a "good case" for having a specific levy to fund aged care.
The commission is examining an hypothecated levy model, similar to Medicare, where taxpayers would contribute funds solely for aged care.
Mr Costello said he was wary of such a scheme, as it was difficult to get the rate right.
He said the Medicare levy only accounted for 15 per cent of public health costs, while a petrol excise designed to fund roads was "overfunding".
Mr Costello warned against raiding the $168 billion future fund, which matures this year, to inject money into aged care.
"This fund, not only is it deriving the Commonwealth income, but it's on the balance sheet and this is where it adds real value," he said.
"At a time when the Commonwealth is borrowing a lot of money, it's got very few financial assets, this would be its biggest financial asset."
The commission has heard residential care providers receive $11.7 billion a year in Commonwealth subsidies and about $12.4 billion in overall revenue, including residents' contributions.
But counsel assisting the commission, Peter Gray QC, said current reporting requirements mean residential providers aren't adequately revealing how they spend the money.
Australian Associated Press