'Target winter fuel benefit to pay for elderly care'

 

MP Paul Burstow says savings could be used to help people with "horrendous care bills"

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Winter fuel payments should be means-tested to help pay for care of the elderly, a former minister has said.

A report by Lib Dem MP Paul Burstow said targeting the allowance would help pay for a fairer social care system.

The report said it could fund most of the £1.7bn cost of implementing reforms of elderly care in England.

While David Cameron said universal benefits for pensioners would be protected the BBC understands ministers are poised to back a cap on care costs.

Last year the Dilnot Commission recommended that the cap on the amount individuals have to pay towards their social care be set at £35,000 over a lifetime.

The commission, set up by the government, argued that such a move would protect people from catastrophic care costs that result in them having to sell their homes.

At the time, ministers said a cap was the "right basis" for change but they needed to look at other cheaper options.

The BBC's chief political correspondent Norman Smith said there were growing signs that a commitment to a cap could be included in the coalition's mid-term review expected to be published shortly.

Start Quote

We appreciate that the country is facing difficult financial times , but we must be careful that the wider implications for older people of any potential source of funding are fully considered”

End Quote Michelle Mitchell Age UK

As things stand, older people in England have to pay for their care costs if they have assets of more than around £23,250. Similar systems exist in Wales and Northern Ireland, but in Scotland personal care is provided free.

Under the proposals from Mr Burstow and the Centre Forum, the cap on the amount people should pay towards social care costs would be set at £60,000 but the amount of assets people could hold would rise to £100,000.

They said winter fuel allowance should be limited to those receiving pension credit.

Pension credit takes into account savings and income, and only the poorest retired people qualify to receive it.

The move would save £1.5bn a year and mean about three-quarters of current recipients would lose the allowance, which is worth between £200 and £300 per household, Mr Burstow's report explains.

The report also proposed ending the relief on capital gains tax at death. This would raise another £600m a year, it said.

A trade-off

Mr Burstow, the former care services minister, said: "Social care isn't free, but it could be a lot fairer for those who have worked hard all their lives.

"By concentrating the winter fuel payment on those eligible for pension credit, we can pay for a cap on care costs."

He said there were 100,000 pensioners with incomes of more than £100,000 a year and questioned whether it was "right" to continue to pay them winter fuel allowance as many of them admitted to using the money for other things.

David Cameron: "I made a very clear promise at the election which was that we would keep the payment"

Michelle Mitchell, of Age UK, said introducing a cap on social care costs would "lift one of the great fears of becoming older".

But she urged caution over taking away other benefits from the elderly.

"We appreciate that the country is facing difficult financial times, but we must be careful that the wider implications for older people of any potential source of funding are fully considered."

'Best model'

The suggestion that winter fuel payments should be targeted comes amid rising controversy about the allowance and amid the continuing debate over how to pay for long-term care for the elderly.

Any commitment to a cap would be significant, Norman Smith added, as previous governments had shied away from such a move due to the huge cost implications involved.

However, he said no details of the level at which a cap would be set, how it would be paid for and when it would come into effect were likely to be given.

Earlier on Thursday, Health Secretary Jeremy Hunt said the UK had a "long way to go" if it was to be regarded as one of the best places in Europe to grow old.

"There is no doubt capping costs - the principle recommended by Dilnot - is the best model. The key question is how to fund it sensibly given the current deficit.

"We are looking at how to achieve this, along with taking action to ensure people do not have to sell their homes to pay for care."

 

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  • rate this
    +2

    Comment number 99.

    Of course it should be means tested so should ALL benefits. Princess Di with all her families billions was entitled to child credit for goodness sake. Which while we're at it, if you want kids pay for them, why sponge off the rest of society to fund them !!

  • rate this
    +1

    Comment number 98.

    Disapointed that lib dems are coming up with proposals like this
    They are helping propagate tory myths

    Whilst it is good to deal with the care crisis and the money has to come from somewhere, means testing is not the answer. A much better solution would be to limit pensions tax relief to the basic rate and raise inheritance tax from 40 to 50%

  • rate this
    +7

    Comment number 97.

    You would think the farce over the rules for who is and is not entitled to child benefit woudl have taught our politicians that means testing is a complex nightmare that costs more to implement than it saves, The original spirit of the welfare system is that everyone is entitled. The difference between the well off and the not so well off is dealt with through taxation and so it should remain.

  • rate this
    +41

    Comment number 96.

    If it was considered as income and taxed accordingly, that would appear fairer. The lower incomes would keep it all and higher ones return at least some of it.

  • rate this
    -30

    Comment number 95.

    I find it crazy that the typical 'baby-boomers' who have experienced consistent property value rises, jobs for life, generous pension schemes that actually paid out the predicted funds, NHS care that they hardly paid into and retirement at 60 - 65 should automatically get winter fuel allowance. Make it means tested now!

  • rate this
    +7

    Comment number 94.

    When are we gooing to learn? Introduce a bureaucratic system and you introduce mega costs to the state. Right or wrong, the simplicity of a universal benefit means it costs less than a complex means tested programme. Leave it be and cut the additional administrative burden and cost of chnage.

  • rate this
    +8

    Comment number 93.

    What happened to the Tories' election promise that an £8000 payment up front at retirement would cover all elderly care costs?
    Just a bit more snake-oil?
    Anyway, its probably just as well that we were not suckered into another private pension style scam!

  • rate this
    +3

    Comment number 92.

    64. PaulErith

    Why should benefits be means tested?

    If someone has paid ten times as much tax and NI as me why should he/she be disqualified from claiming ?

  • rate this
    +9

    Comment number 91.

    This is ridiculous! Yet more bureaucracy/paperwork to means-test yet more benefits, some of which are low out-goings to start with. It's grotesque. KEEP IT SIMPLE. Give all pensioners in the land a heating allowance and tax rich people more if you need to claw the money back. Why are politicians now so afraid of "universal" benefits? I'm sick of this (and I'm a Lib Dem, like Mr Burstow). Stop it!

  • rate this
    +4

    Comment number 90.

    . . . introduce marginal flat tax with negative income tax . . . the margin takes people out of tax . . . the tax rate can be adjusted to ensure the higher paid pay their share . . . and negative income tax replaces all benefits . . . the reverse payment increases as the tax rate increases . . . the margin is applied to a household and can include dependants . . . simples!

  • rate this
    +2

    Comment number 89.

    The real problem here is that future generations will need such payments after Gordon Brown / New Labour's raid on private pensions which has resulted in a melt-down of good private sector pensions ... perhaps take it away from those ex-public servants who have retired on gold plated final salary schemes and save for all of us who will need it as we retire.

  • Comment number 88.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +6

    Comment number 87.

    Firstly, it is totally incredible that most of the thousands of British pensioners living on Corfu are entitled to Winter Heating Allowances. (A Summer Cooling Allowance would be better !!!).

    Secondly, just like the restrictions on Child Allowances (3000 new admin staff for the purpose!), Very Expensive to administer - Hand it out to all and just TAX IT back from those who don't need it - Simple!

  • rate this
    +7

    Comment number 86.

    Perhaps Mr Burstow could publish a report on the massive problem of Tax Dodging and ongoing corruption in Westminster and the EU. Or would that be to sensitive for you to deal with? Why pay NI or pay into the kitty if you cannot get back what you pay in irrespective of background.

  • rate this
    -3

    Comment number 85.

    This is a good idea. My mum is on a healthy (final salary) pension and has solar panels that produce as much leccy as she needs, but still recives the winter fuel benefit as she is of a certain age.

    Even she's said she doesn't need it, means testing could save us billions.

  • rate this
    +10

    Comment number 84.

    Why not means test MPs' right to claim expenses first? Plenty of very rich people draining the public purse unnecessarily there and a gold plated pension to boot.

  • rate this
    +1

    Comment number 83.

    Sounds a fair idea, but I'm sure the rich who paid none or little tax during their working life would soon find a way to beat any means testing. End up hitting the usual hard working tax payers, who have saved for a small private pension and paid to own their house Its the same the whole world over, its the poor what gets the blame. Its the rich gets all the pleasure ain't it all a blooming shame.

  • rate this
    +2

    Comment number 82.

    "41. DaveC ... I could be receiving a state pension, pension credit and a host of other freebies."

    You should already be receiving a state pension, and additional state pension (you've worked), winter fuel allowance, etc. Pension credit is a top up, but it's not a lot more. I guarantee you're better off with your private pension, but you can give that to me if you want and try pension credit.

  • rate this
    +2

    Comment number 81.

    Fully agree with Paul Burstow's comments. Just as Child benefit is being taken away from parents on a certain income threshold. The winter heating allowance too should be treated in exactly the same way. Why should a multi millionnaire gain from the taxpayer to heat their property?

  • rate this
    +3

    Comment number 80.

    Definitely no means testing. Why should those that have saved their earnings suffer at the expense of those that have blown their wages as soon as they had been paid. It is people's lifestyle choices that have got them where they are today. Their decisions - no one else should be expected to pay for them. Either withdraw it completely or keep as is.

 

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