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Another way to tackle the care crisis?

14 May 2012
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A white paper on care is due out shortly and it’s almost a year since the Dilnot report on reforming care funding. So it’s remarkable that the government seems no closer to reaching a way forward on the pressing issue of how we pay for better care for our ageing population. Yet without urgent action on funding, the care system is in danger of collapsing.

The care sector has almost unanimously backed the Dilnot proposals for a cap on care costs faced by individuals. But too many questions remain unanswered about the Dilnot proposals. They would make the current confusing care system even more complex, would be regressive, would add substantial transaction costs, wouldn’t meet current unmet needs and future growth in demand for care, and would not support joined up care and health and promote prevention.

As a result no ‘simple, fair and sustainable’ solution is on the table. United for All Ages therefore calls on government to look again at how a tax-funded care system could tackle the Dilnot questions and deliver better care in a way that is intergenerationally fair with wealthier older people paying more.

Our new paper, The Care Crunch, argues that tax funding would not only be fairer than a cap on care costs but it would also enable joint working between health and care and preventative work to keep older people out of hospital and better supported at home. Care costs should be tax-funded but not the hotel (accommodation, food etc) costs of residential care, thereby creating a level playing field for care homes and home care.

Rather than looking to income tax which is paid by the younger working population, the paper says that sufficient funds to cover increasing care costs could be found from wealthier older people by:

  • Means testing universal benefits for older people like winter fuel payments, TV licences and bus passes that wealthier older people don’t need and redirecting the savings to pay for better care

or

  • Introducing a care duty on estates above a certain value eg 5% on estates worth more than £25,000, and use the extra funding generated from larger estates to pay for better care (like the 1p on national insurance to pay for the NHS). A collection system is already in place and payment would be linked to wealth and end of life care.

The government should look again at taxation as the basis for a fairer care system whereby older people’s contributions reflect their wealth and the risks and costs of care are collectively shared. Care is a public good – like health and education – and none of us know whether we will get dementia for example. So sharing the costs of care through taxation of older people’s wealth must be a better way forward. Will the government rise to the challenge in its white paper?

Stephen Burke is director of United for All Ages. The Care Crunch can be obtained from www.unitedforallages.com