Monday, 24 November 2014

Care costs for elderly to be capped at £75,000

The government is expected to announce plans to cap the overall cost of care for individuals at £75,000, despite recommendations to set the limit much lower.

Health secretary Jeremy Hunt is expected to reveal his policy on long-term care funding in the House of Commons later today after months of discussion.

From 2017, pensioners and disabled adults will have to pay up to £75,000 of any care bills they incur before the state steps in under the new arrangement. There will also be an increase in the means-test threshold, so that anyone with assets of under £123,000 will automatically receive free care.

Currently, if someone needs residential care and has more than £23,250 in savings, capital or assets, they must pay for their care in full. The increase in the threshold is likely to help more than 100,000 extra pensioners.

The government is likely to say it will fund the changes by freezing the inheritance tax threshold for three years.

Economist Andrew Dilnot recommended the introduction of a cap on the amount individuals have to pay towards the cost of care in a report for the government published in July 2011. His report suggested a cap of £35,000, but the £1.7 billion cost of this was judged too expensive by the Treasury.

Social landlords have previously criticised the government for dragging its heels over the implementation of reform, saying it breeds uncertainty in the care sector.

Mr Hunt told the BBC’s Andrew Marr Show yesterday that the government is trying to avoid people having to sell their homes to pay for care. ‘The worst thing that can happen is that at that vulnerable point in your life you lose what you have saved for,’ he said.

‘What we are trying to do is be one of the first countries in the world that creates a system where you don’t have to sell your home.’

Deputy prime minister Nick Clegg gave the same message in an article published in yesterday’s Sunday Telegraph. ‘Every year between 30,000 and 40,000 people sell their home to pay the bills: between 80 and 110 people every single day,’ he wrote. ‘That simply isn’t fair, and tomorrow the government will be confirming our plans to change the system.’

Readers' comments (23)

  • Chris Webb

    With absolute respect to the unfortunate persons falling into a condition where they can no longer care for themselves, and their family cannot or do not wish to care for them, why shouldn't their assets be taken into account for a means tested benefit?

    If we are to agree that care provision should be via the NHS, and so free at the point of use, then we will also need to agree on the level of taxation to fund such. However, if we are to continue with the part-private care industry, and the associated financial products and investment returns that goes with such, then the rest of the philosophy that goes with this, that the consumer pays, should be applied.

    Let us have one or the other.

    It seems contradictory that on the same day young adults are being told that their families must support them and that they cannot have the independence that they may require - they should have to pay their own way etc - that the government is also saying that we cannot take away the asset value of a persons' home when they no longer require it because they cannot live independently. Supposedly, this is to avoid the unfairness of the children not inheriting their parents 'investment'.

    If the children want to inherit their parents home, the answer is simple - care for the parent rather than expecting the State to pay for it, or at very least use the assets available to assist with caring for the parent.

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  • Chris

    ‘The worst thing that can happen is that at that vulnerable point in your life you lose what you have saved for,’ says Mr Hunt, who is part of the government currently throwing vulnerable people out of their homes if they have committed the multiple offence of being a social tenant on low or no pay and not making 100% use of all the room all of the time.

    This government is kicking the hell out the poor and the vulnerable, but as soon as it comes to the poor vulnerable, who own property that may be inherited by the people the government determines as 'deserving' then that is a different matter. No means test argument for them. No having to enjoy self-reliance. No ending the something for nothing culture for the progeny whose noses are poised above the trough.

    Such double standards are depressing, not least because the yapping majority will all say Aye, applaud, and then carry on knifing the poor tenants next door in the back.

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  • I have never understood what the problem is here. If you have to go into care you don't need a home to live in. Why shouldn't it be sold to defray the costs of care? Clearly I am out of synch with a lot of people who feel that this "isn't fair".

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  • Gavin Rider

    hulagu - the issue of "fairness" arises because if you have lived your whole life "to the max" and spent every spare penny you have by being profligate and not saving, you get your care costs met entirely by the state.

    If you have earned exactly the same amount over your lifetime, made the same contributions and paid all the same taxes, but have been frugal and have saved, when it comes to your retirement years the money you have saved for yourself is taken by the state to cover the cost of your care, which actually amounts to a secondary tax.

    This is inherently unfair. One should not be rewarded for having been a spendthrift all one's life by having all one's bills paid for by the taxpayer.

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  • Gavin Rider

    Chris - the whole point about social tenants who are under-occupying their social homes is that they have not invested anything at all towards their enjoyment of such unneeded advantage in their later years, they have just been paying rent at an already highly beneficial rate. If the gravy train finally runs off the rails and the advantage stops, it is not actually taking away something that the tenant has paid for himself or invested anything towards.

    This is not at all equivalent to a person who has invested towards their own retirement years and who then has their investment plundered by the government to pay for care that would, in the absence of that investment, have been provided free of charge.

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  • Gavin - so who decides who has spent their money on living the high life, and who has lead a life of poverty due to low income if at the time when care is needed they both have no money in the bank? Social gatekeeping my friend.

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  • "Every year between 30,000 and 40,000 people sell their home to pay the bills...That simply isn’t fair"

    Bold statement, there's a lot of ambiguity in the word "fair" to start with. Should people in society paying high private rents who can't afford to buy their own home be forced to pay higher taxes to cover for the care of the wealthy elderly so they can keep hold of their homes?

    Not saying that they should or shouldn't but it's really a case of political ideology and not fairness.

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  • Gavin Rider

    housingplus - it is not a question of anyone having to decide who has lived the high life and who has led a life of poverty.

    The issue is whether it is fair to seize the assets of someone who has done neither when the same care is provided at no charge to someone who has no assets, for whatever reason.

    We all pay national insurance contributions and tax throughout our working lives and that should pay for (or at least entitle us equally to) care in our old age, as a right. If someone lived in poverty and could not pay the contributions necessary to entitle them to care, then they should receive it as a state benefit. If someone decides that they want to provide for themselves and go private, that is up to them because they are spending their own money as they choose.

    But for the state to decide that it has a right to seize the assets of someone who has saved towards their retirement and take those assets in payment for care that would otherwise be provided free as a contributed-for entitlement is unfair in the extreme.

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  • Jimmy Cricket

    But isn't it the same for any means tested benefit? I don't get my mortgage paid by housing benefit, or free/discounted council tax, or free dentist treatment, school meals for kids etc etc.

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  • Chris

    Yes and No C'mon Sense.

    For the other means tested benefit, the capital value of the home that you live in is not taken into account. But that is the point of those no longer capable of living independently and so living in a care home - they own property that is not their 'home' so it is now a capital asset. It has no use to them as they cannot occupy it. It only has use to the 'hangers-on' waiting to inherit their 'due'. It is these vultures who complain about the capital being used up for care costs instead of filling their own pockets - note the lack of concern for the person needing care by the way, simply concern over how much wonga they may leave when they die.

    Meanwhile, these pleasant relatives who are unable to care for their 'loved one' whilst waiting to inherit their 'loved one's capital are free to moan about others getting means tested benefits whilst owning a flat screen TV, or heaven above a decent car!

    As I said, and have been proven 'prophetic': 'Such double standards are depressing, not least because the yapping majority will all say Aye, applaud, and then carry on knifing the poor tenants next door in the back.'

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