by Peter Watt
It may have been a dream once, but free social care for adults who need it is not going to happen. The majority of adults in this group are aged over 65, about 1 million of them. The state does not currently pay for all of their care and so many have to pay some or all of their costs. The reality is that whoever is in government in the future, this situation is only going to get more difficult.
Right now, if you think that you need social care then the local authority has to carry out an assessment of your needs and then and assessment of your finances. Firstly they see if you are sufficiently impaired so that you need help and then they decide if you or they have to pay.
Increasingly though, the thresholds being used by councils to decide if you are sufficiently impaired are being raised; it means that the numbers of people that they have to provide help to can be reduced along with their costs. But it doesn’t mean that the needs are less!
So many people who need help with washing, cooking, dressing, and so on have to pay someone to do it. And similarly many people who need to go into residential care have to pay. Essentially if you have savings of less than £14,250 then care at home is free; between that point and £23,250 the costs are shared and after that you’re on your own.
If you need residential care and own your house then, unless your partner is continuing to live there, then you will probably have to sell your house to pay for your care. Quite frankly the situation is a nightmare for hundreds of thousands of families. You don’t think about it until it is too late; you don’t know what it is you may have to pay for and you don’t know for how long you will have to pay!
The result is that 800,000 older people are going without the care that they need or are relying on friends and family, whilst a further 500,000 are paying for their own care.
But the answer is not to pretend that somehow it can all be solved just by throwing money at the problem. Or that it is all the fault of the government and cuts. Labour had 13 years to solve it and didn’t; we don’t have the money and quite simply we’re not going to have it.
The need to reduce our structural deficit means that there are hard choices to be made by this government and the next. The fact is that many older people do in fact have the resources that mean that they can contribute to their care.
We need to be honest and say that it is not fair on younger generations that they should be taxed and squeezed more and more whilst older people don’t pay their part. It is why the “granny tax” charge made against the budget was good knock-about politics but was quite simply wrong.
Of course older people should pay their part and any increase in tax is controversial; but it doesn’t mean that phasing out age-related personal allowances wasn’t right. Incidentally, it is also why we should also be looking to means testing free bus passes and winter fuel payments.
But equally it is not fair and not sustainable for people to be expected to prepare for an old age or infirmity without some support. The fact is that a quarter of people aged 65 will need to spend very little on care before they die. Half will face costs of about £20,000 and only one in 10 will see costs rise to hundreds of thousands of pounds.
For most people therefore, the costs that they will face are manageable; or at least could be if they were helped to prepare. The problem is that for the one in 10, unless you are very wealthy, the costs are simply not affordable whatever.
But preparing for infirmity is not something that we do and anyway do you prepare for the £20,000 or the £100,000 plus? We take out life insurances and insure our mortgages and possession but no insurance company is going to be able to provide affordable cover for the potential higher end costs of social care. And anyway, with a 1:10 chance it is worth the risk!
Which is where the state should step in. Not with blank cheques and unaffordable pipe dreams. But with the sensible provision of a shared insurance against the 10% chance that we could all face unaffordable social care costs. It is right that I should have to pay towards my own social care if I need it; and if I know what the maximum I will have to pay is then I can plan for it.
And the only way that I can know what the maximum will be if the government says that it will cap the amount that I will have to pay. In other words it agrees to cover the top end costs – the one in 10. If I know that there is a consistency of threshold for local authority provision across the country then I will know what I can expect to receive whether I am paying or not.
I could prepare then. Insurance companies could develop policies that people could afford. People would know that they would not have to sell every last bean if the worst happens. Families won’t face the fear of not being able to afford mum or dad’s care.
It won’t be cost neutral to the state; Andrew Dilnot estimated additional costs of £1-2 billion per year; but it will be fairer and the costs will be more sustainable and predictable. Bear in mind that currently, once my savings have gone the state has to pay – but they have no idea when that will happen. It is a social policy that is both progressive, timely and is a response to a social need in tune with our austere times.
The Labour party is right to demand the implementation of the Dilnot Report ‘Fairer Care Funding’. And whilst yesterday’s government announcement was welcome, they are wrong to delay. And whilst they delay, thousands of families continue to worry and continue to suffer.
And they can’t blame Labour or the deficit – only themselves.
Peter Watt was general secretary of the Labour party
Tags: Dilnot commission, Peter Watt, social care
Something has to be done, but can you imagine any cross party agreement while Cameron is in?
I welcome the steps made to improve adult social care with the new white paper issued yesterday and I am pleased that Andrew Lansley acknowledges the need for further reforms and that these need cross-party agreement to ensure long-term stability of care provision. The prevailing school of thought seems to be that people should not be forced to sell their homes to pay for their care in old age. The proposal of allowing a deferred payment seems to be a sensible halfway house; allowing people to remain in their homes as long as possible. The Conservative party, however, seem unable to accept that a collective solution is the most equitable and would be more effective in providing quality care for all who need it.
For social care provision to be funded effectively it would seem that increased funding will be required from all those who can afford to do so. The lottery of who needs care does not respect boundaries of wealth or status; for care to be funded efficaciously then their needs to be a collective agreement to pay more. Polly Toynbee goes into much more detail in her article for the Guardian. Andy Burnham has been remarkably restrained in his comments, but the Labour propsals pre-2012 have been largely vindicated by the results of the Dilnot Commission, which proposes a £35,000 cap on contributions with any further contribution being provided by the state. In addition the means-tested threshold, above which people are liable for their full care costs, should be increased from £23,250 to £100,000
The issue that I wish to explore, however, is that the premise of who pays for social care is often predicated on the value of one’s home. The individuals from the older generation, as presented by the media, are always ‘hard-workers’ who have ‘paid taxes all their life’. Unfortunately the tax they paid was to provide services for a much smaller population, which comprised a much smaller percentage of elderly and infirm. The value of the assets held by the wealthier retires is often a result of property speculation and as such is unearned wealth. The home they live in is commonly worth multiples of what they paid for it. The wealth that they hold is therefore a result not just of their hard-work but the increased prosperity of society.
Something has to be done but can you imagine any cross party agreement while Miliband is in?
You make a very good argument about the problem and interesting comments about *some* of the solutions. However, when you mention the word “insurance” you instantly fail. We allowed insurance companies to run pension schemes and that is why we have a crisis in private pensions: their executives and sales staff are overpaid taking money that should pay our pensions. These leaches should not be allowed near the funding of social care.
Let’s look at the facts. Lansley’s solution is deferred payment. The “deferred” part is right, as you mention, but what people pay for is wrong, for the reasons you give: some people do not need care, and some need costly care. Lansley’s plans means that people are still responsible for the entire cost of their own care, but they will only pay the bill from their estate (presumably, only after their partner dies if their partner lives longer). This is the Tory wet dream of absolute, and utter personal responsibility: they believe that everyone should be responsible for *exactly* what they need and nothing else. Deferred payment is worse that the current situation.
You perpetuate the idea that people should have some responsibility for costs which are often not their fault: we cannot control are genes that mean some people will have a stroke and need a decade of social care and others will have a healthy life until a few months before they die.
What we need is proper risk sharing. This is what civilised societies do. Some people will need social care, others do not. But the risk sharing should be carried by all, because none of us know for sure whether we will need that care. Deferred payment of the cost of this risk sharing is the right thing to do. The only way to do that is to provide a tax paid by *everyone* through their estate after their death. Raise inheritance tax? Possibly. A separate social care tax paid by estates? Probably. Coincidentally, this is one of the options that Andy Burnham suggested before the 2010 election, it was the right option then, and the right solution now. Whatever you do, do not persist the right wing agenda that society is relieved from its risk sharing responsibility. If you do that the next target will be the NHS.
I can Anon E Mouse – all three parties would have had broad agreement except for xxx thing etc then Miliband would have said `we all support it except we need a further thirteen months/years (delete as applicable) to talk about it so we’ll vote for the broad principles but not the actual motion to make it happen. That way we can tell our gulible supporters we supported it without effectively supporting it and have a childish spat with Nick Clegg (always good for a laugh, innit)
Thanks for the comments. Richard Blogger, I’m not saying that insurance is THE answer. Its part of a range that includes a safety net, self insurance through savings and insurance companies. But for any of this to be practical the state had to cover the most expensive possibilities that a minority of people face.