Care Fund Proposal for the Elderly

www.new.edp24.co.uk

February 25, 2009 

United Kingdom

Older people could be spared the heartache of selling their home to pay for a care home place if the government creates a new social fund to support the elderly, it was revealed last night.

The radical shake-up of how care is funded in later life was suggested by a campaigning charity yesterday as it put forward a plan to address what it believes is an urgent problem for the country's growing elderly population.

Counsel and Care, which works with older people, their families and carers, said that a new “care duty” on estates could generate up to £3bn a year - which could then fund the immediate long-term care costs of the elderly and the disabled.

It is estimated that 60,000 elderly people pay for a care home place each year by selling their own home, a number which is likely to increase as property ownership is greater within younger age groups and more people are expected to pay for their own care. 

Stephen Burke, the charity's chief executive, said growing numbers of families are faced with huge home care bills, a problem that has worsened during the credit crunch.

“The current economic downturn cannot be used as an excuse to delay action any longer,” he said.

“We cannot ignore the care crisis. It's one of the biggest challenges facing us all for decades to come and requires urgent and radical reform.

“It would be much fairer if better care was funded through a care duty on people's estates, with a small percentage paying for care.

“Rather than losing the family home, people would pay a bit more through inheritance tax. The care duty could top up current public spending or be ring-fenced and used as part of a new social insurance scheme to pay for care.

“This proposal makes sense because we already have a probate system for collection, and it would keep track with demographic changes and increased personal wealth.”

The care duty would apply at 2.5pc on estates over £25,000 and up to £312,000 and £624,000 for couples, which are currently exempt from inheritance tax. 

It means that people with an estate valued at £250,000 would pay £5,625 at 2.5pc or £9,562 if the rate was increased to 4.25pc. 

Counsel and Care believes this would conservatively yield £1.7bn each year - or £2.9bn if the rate was increased - which would fully fund the long-term care costs of older people without needing to significantly increase net public expenditure.

Mr Burke described the government green paper, which is due to be published this spring, as a “once in a lifetime opportunity” to create a new care system that that meets the needs of this generation and future generations of older people. 

The green paper also concerns care and support to anyone to help them live independently, including occupational therapy, benefits, care for the disabled and support for carers. 

Age Concern Norfolk did not wish to comment on the proposals but said the funding of personal care was “huge” and fraught with misunderstanding. The charity takes two or three calls a week on the subject in Norfolk alone.

Linda Gill, development manager for advice and advocacy, said: “It's a huge issue, and one that many people don't really understand.

“Some family members don't want their elderly relative to go in to care because they don't want the house to be sold, even if there is a real need or desire from the older person; they are often put under pressure to stay at home so they don't have to use their house as payment.”

Ahead of the November budget last year, Age Concern England revealed that thousands of older people needing residential care and their families are being unfairly stung for fees. 

It found that nearly 40pc of people in care homes are paying their own way because they fail the means test for local authority help. 

Those who only have a little more than the cut-off point of £22‚250 for help from social services will have their assets depleted rapidly by the cost of care home fees‚ which average nearly £24‚000 per year.

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