Paying for social care- Jeremy Hunt aims to bring clarity and affordability
Plans for a £75,000 cap on the amount the elderly will have to pay for social care in England will give people “greater peace of mind”, Health Secretary Jeremy Hunt has said.Mr Hunt told MPs the current social care system was unfair and left many families facing “ruinous” costs.
He also announced a rise from £23,250 to £123,000 in the amount of assets people have before having to contribute to the costs of basic nursing care.
At present, up to 40,000 people every year are forced into selling their homes because they face unlimited care bills.
The health secretary said many families currently faced “often ruinous costs…with little or no assistance from the state” and the proposed new framework, due to come into force in 2017, would bring “greater certainty, fairness and peace of mind”.
Ministers may be giving themselves a big pat on the back for their changes to the social care system- but for many involved in the sector this is just the start of the process.
Firstly, the £75,000 cap is more than double the figure recommended by Andrew Dilnot, the independent expert asked to look at the issue by government two years ago.
While publicly it is being welcomed – campaigners have been promised reform ever since Tony Bliar came to power – there is a nagging fear that it is too high to really get people engaged with planning for their old age.
And, secondly, this reform does nothing to improve the quality of services currently on offer- it is purely aimed at preventing people having to sell their own homes to pay for care.
Local government has long argued the system is dramatically under-funded and services are suffering as a result.
Of all that some say needs to be done, the introduction of a cap may well turn out to be just the tip of the iceberg.
While costs vary hugely, it is estimated that half of all people turning 65 in future will have to pay up to £20,000 towards their basic nursing care – such as help to get washed and dressed – while, for one in ten, the figure will be above £100,000.
This figure would only cover the cost of nursing care and people would still have to pay for accommodation and food – although some support will be provided.
If the changes are approved, people are only expected to start receiving support above the £75,000 cap by 2019 at the earliest.
But the hope is that, by establishing the principle that the state will cover the really high costs, people will start planning for their future care needs in the way their do for their pensions in retirement.
The government is also proposing increasing the means-tested threshold – there to ensure the less well-off get state help towards their care costs.
Currently anyone with assets of more than £23,250 has to pay for their care. Under the plans, the threshold will rise to £123,000, reflecting the fact that rising property prices over the years have effectively meant any home-owner falls outside the state system.
Mr Hunt also confirmed that the plans, expected to cost about £1bn a year, will be part-funded by freezing the inheritance tax threshold – at £325,000 for individuals and £650,000 for couples – for three years from 2015.
That is despite Chancellor George Osborne’s Autumn Statement pledge, in December, to raise the threshold by 1% – to £329,000 for individuals and £658,000 for couples – in 2015/2016. And breaks another election pledge to raise the inheritance tax threshold to £1,000,000.
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