Elderly care: The other options

Elderly hand holding coins There is disagreement over how reform of social care should be paid for

There is now a growing consensus that elderly care needs reform.

Councils are increasingly having to ration the support they provided in people's homes and the care home places they fund.

But the big unsolved question is how to pay for change.

In 2011 the government-appointed Dilnot Commission recommended an individual's lifetime costs be capped at £35,000 in England.

But this would cost £1.7bn a year - a figure which would rise in the future.

Ministers have spent the best part of two years discussing how to proceed, but have yet to reach agreement.

In many ways that is not surprising. Reform of social care has actually been on the agenda since Tony Blair came to power in 1997, but a combination of cost and complexity has meant that no government has felt able to push ahead with reform.

Lib Dem MP Paul Burstow has waded into the debate by suggesting the winter fuel allowance should be means-tested to pay for a cap on costs.

But this has caused controversy among some and, what is more, David Cameron has always promised the payment - worth between £200 and £300 for the over 60s - would not be cut.

So how else could it be paid for?

Setting the cap at a higher level

The Dilnot Commission actually suggested a level of between £25,000 and £50,000 with £35,000 being the favoured amount.

The thinking was that this was a sum that was affordable enough to get people engaged with planning for old age, but low enough not to be a drain on the public purse.

The hope was the insurance industry would start to develop products safe in the knowledge that the catastrophic costs - one in 10 face bills of over £100,000 - would be covered by the state.

However, ministers are known to have being discussing whether it would be feasible to set the cap at a higher level, perhaps even as much as £75,000.

This, of course, would be cheaper for the government. However, some have expressed concern that setting it so high would discourage people from planning for old age.

Raiding other benefits and budgets

Since the Dilnot recommendations were published a variety of other funding sources have been put forward to pay for it.

Who gets what care

social care promo image

Last summer the Nuffield Trust think tank highlighted a range of benefits that could be targeted.

These included the free TV licences and travel concessions that older people are entitled to as well as the winter fuel allowance.

It also suggested the NHS surplus - which stood at £2bn last year - could also be used.

Others have looked at some of the tax-related benefits the elderly are entitled to, such as relief on capital gains tax at death and those related to pensions.

Get everyone to pay

This was actually proposed by the Labour government in its final months before the 2010 election.

The then health secretary Andy Burnham, who is now the shadow health secretary, called for a universal levy that everyone but the poorest would have to pay.

The figure put forward at the time was £20,000, which was thought to be enough to cover the costs of everyone who needs care.

One of the options floated was allowing people to defer the payment until after they die, prompting the Tories to dub it a death tax.

The idea was soon put on the backburner as the election campaign got into full swing, but many within the sector thought it was an excellent idea.

Pool budgets with the NHS

The NHS budget tops £100bn - six times what is spent on social care.

If just a fraction of health spending was diverted to social care, councils argue it could make a big difference to the services they could provide.

Even just a little more collaboration could make a difference as there is a great deal of cross over between the two sectors - particularly within NHS community services such as district nursing.

Such moves benefit the NHS as well. When vulnerable elderly people do not get support from councils their conditions can worsen, leading to hospital admissions.

To some extent this has already been recognised by ministers - by 2015 £1bn of NHS money will be reserved for supporting social care.

But some believe there needs to be a much more radical approach. In Labour circles there is talk of merging the two budgets.

How this would work in practice and whether it would negate the need for a cap on care costs remain to be seen.

Nick Triggle Article written by Nick Triggle Nick Triggle Health correspondent

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  • rate this

    Comment number 29.

    Once the Government started destroying our industrial base then the big problems started
    Contracts awarded to overseas companies, BILLIONS going abroad
    Overseas companies own our industrial base

    In France or Germany local companies ALWAYS win

    In Britain even the government undermines its own people and industries so we can hardly be surprised when everything falls apart

    You reap what you sow

  • Comment number 28.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 27.

    Thank you, yes, I do know that.

    I was using irony as a way of making the point that NI used to be a separate pot, until successive Governments spent it all.
    Successive Governments elected by those now nearing retirement on the basis of their low tax policies which were possible because they were spending all the NI money.

  • rate this

    Comment number 26.

    The flip-side of this is that there definitely needs to be some compromise in retirement expectations. Otherwise all those people demanding "free unlimited healthcare for all" shouldn't be surprised to find someday that all of the working-age people you expect to pay for your retirement emigrate.

  • rate this

    Comment number 25.

    Just goes to show debased the decision makers in this country have become - caring for those in society that need it is a basic humanity it is not about accepting negligence while shed loads of money is thrown at shoring up bankers, MPs fiddling their expenses and other outrages that are commonplace.

    Two tier country where casino bankers and the rich are more important than frail elderly. Arghh.

  • rate this

    Comment number 24.

    Napeolon is always right

  • rate this

    Comment number 23.

    Women believe they are entitled to maternity leave, while also being paid to leave their children in nurseries where the care of their children maybe compromised by paedophiles who are not screened sufficiently to prevent this from happening.In the meantime, people with large homes, even larger incomes are receiving benefits. Benefit culture is so pervasive!

  • rate this

    Comment number 22.

    I left school aged 15 in 1965 and have worked ever since. Reasonable people would say "you have paid enough, go enjoy your retirement".
    However, the pledge breaking LibDems wish to attack the elderly to save money.
    I suggest a person who has spent 20-30 of their working years abroad or in prison who has not contributed should not receive these benefits. This will save a lot of money, simple.

  • rate this

    Comment number 21.

    The major problem is in paying for us older folk who haven't had time to genrate the funds required. Means-testing benefits will not produce the savings - they will go mostly in administering the means-testing! The real problem is short-sighted politicians who are too afraid of the next election results to tackle anything seriously.

  • rate this

    Comment number 20.

    Providing care for the elderly is a must for any civilized society should not be restricted based on money.
    Provide good care for those that need it. There is absolutely buckets of money in this country it is just a matter of spending it on the right things.

  • rate this

    Comment number 19.

    The welfare state sucks any aspiration of those who are not willing to work etc

    The welfare state worked well when everyone had a job

    Once the Government started destroying our industrial base then the big problems started
    People gravitated towards the only source of income remaining.


    Curiously, the Government DID keep our non wealth creation jobs going

    health, education etc

  • rate this

    Comment number 18.

    This issue is a crucial one for us all and getting bigger all the time

    there are other solutions available see Will Hutton's excellent article from the Observer on 30th December


    I would like to see a summary of the finances necessary which we could all agree on

  • rate this

    Comment number 17.

    Perhaps we should care for our elderly instead of sending them to care homes - whatever happened to families taking care of their own.

    I blame the welfare state which creates a culture of dependency from cradle to grave.

    The welfare state sucks any aspiration of those who are not willing to work or care for their families.

    Fathers are able to evade their responsibilities. More to come!

  • rate this

    Comment number 16.

    Residential care for the elderly should be free to all at the point of delivery, like other health services, on the referral of a GP or social services. The money to pay for it should come from the beneficiaries, by which I mean not the care recipients but their heirs who are absolved from care duties themselves. Call it a death tax if you will, but reform of inheritance tax is the fairest way.

  • rate this

    Comment number 15.

    6. Some Lingering Fog
    @1. HaveIGotThatWrong

    Surely that's what we pay out National Insurance for ?


    Oh dear. NI isn't a separate pot of money you know, it is just an income tax top up and is used for general government spending.
    Thank you, yes, I do know that.

    I was using irony as a way of making the point that NI used to be a separate pot, until successive Governments spent it all.

  • rate this

    Comment number 14.

    They need to get their figures right to start with. The winter fual allowance they are stating is between £200 & £300, but the true payment to an individual pensioner is only £100 and £200 for a coup;e aged between 60 & 79. this makes their calculation on how much they would save by means testing this benefit is at in error straight away

  • rate this

    Comment number 13.

    The NI cash has already been spent so everyone who pay NI is only paying for current expenditure. The only pot of cash will be that in our kids pockets. Just remember to sell any property on retirement & rent. Then if you go into a home the council will pay. When my aunt went into hospital after her stroke the first question I was asked was "Does she own her home?"

  • rate this

    Comment number 12.

    Why didn't Hague give the approx £56million to us for care instead of to the 'Syrian rebels?'
    That's just one huge sum this dangerous gang of a government found.
    Near to a million pounds for every man woman and child in the UK.

    Who received this cheque? Whose name was on it?
    It was certainly the taxpayers money, wasn't it?
    Or was it niot paid out yet?

  • rate this

    Comment number 11.

    Easy one this, All it takes is Political Will.

    1) Maximum benefits 50% of Min Wage Per Adult Per Household, Receive additional 50% for doing community work.
    2) All other money from the benefit system paid to those after every decade of work as pension credits, boosting income in old age.

    This system would allow older workers to retire and the young to gain work.

    No benefits for Non-British

  • rate this

    Comment number 10.

    If our politicians hadn't broken up families and isolated the elderly from their siblings this would never have become such a massive issue

    In the drive for corporate profits only the young matter... but how do we pay for the people the capitalists don't want??

    This issue will be huge once the post WW2 socialist generation are gone

    No more pensions from Nationalised Industries = no more cash


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