Britain’s old-age care system is “a shop with no prices” only suitable for the “very, very wealthy”, as economist and former director of the Institute for Fiscal Studies Andrew Dilnot puts it. So in a bid to win over the grey vote and tackle the rapidly rising cost of long-term care in old age, the government has announced that from April 2017 you will only pay the first £75,000 of care costs, after which the state will step in. Meanwhile, the means-tested asset threshold, up to which people are spared the full costs of care, will rise from £23,250 to £123,000.
While we should welcome any simplification of the care system, Dot Gibson, general secretary of lobby group the National Pensioners Convention, has a point when she says in The Daily Telegraph that “the plan as it stands is about as credible as a Findus lasagne” – though not perhaps for the reasons that Gibson thinks.
So what’s the problem? The government argues that by specifying a single £75,000 cap, the elderly will be more easily able to get insurance against the cost of old-age care, as insurers will now know exactly how much an individual is expected to pay. Health Secretary Jeremy Hunt claims that this, alongside the increased means-tested minimum threshold, would make Britain “one of the first countries in the world which creates a system where people don’t have to sell their own house” to fund their care costs.
But does it? The £75,000 cap (£150,000 for a couple) is way above the £25,000-£50,000 level recommended by the expert commission chaired by Dilnot. That’s largely because his original cap would have cost a cash-strapped government too much money. For many couples, £150,000 is a lot of money to find, so many will end up having to sell their homes anyway. As Gibson notes, this cap will help just one in ten of those needing care. Also, the new cap only applies to personal care and excludes board and lodging. The government claims this cost will be limited to £12,000 a year (£24,000 per couple), but that’s still a fair whack.
Is this obsession with homes the right goal at a time when the government is broke and many older people are sitting on a lot of housing equity? As Philip Johnstonputs it in The Daily Telegraph, “should someone’s house, usually their most valuable asset, be uniquely protected in this way”? According to the Centre for Policy Studies, in 2008 the proceeds from selling the average house were sufficient to pay for 8.8 years of care, “much more than the average required”. The fact is, says Johnston, “what we are really talking about here is protecting the capacity of people to leave money and property to their children… It is a morally dubious policy for the taxpayer to underwrite the inheritances of the wealthy.”
Our biggest gripe is that these proposals do nothing to address Britain’s biggest problem – an acute shortage of clean, safe and affordable care homes.