The Tory answer to the question “who pays for social care?”: You!

Inheritance
Image via WikiHow

Two excellent responses to the Conservatives’ social care manifesto proposal: Torsten Bell at the Resolution Foundation and, of course, The King’s Fund.

It took me quite a long time to figure out the main implications of the proposals (I’m not sure I understand them even now).

We can summarise them as:

  • If you have assets under £100,000, you’re a winner
  • If you have assets over £100,000, you’re not a winner

In essence, the Tory answer to the question “who pays for social care?” is “you, not us”.

Coupled with the proposal to scrap the universall Winter Fuel Allowance, one argument is that the Conseratives’ proposals are progressive, redistributive mechanisms that will benefit people from lower incomes, or working-age people who have been reliant on social care for their adult lives (and are less likely to have built up assets).

The counter argument – including when comparing the proposals against the Dilnot Commission’s proposals – is that these proposals create a further breakdown in the inherent universalism and sharing of risk that only government can provide (see also: the NHS).

These proposals may provide a financial solution to the social care crisis*, but they certainly don’t shore up the idea that “we’re all in this together”.

*Though deferred payments from housing still requires large short- and medium-term injections of cash, and we don’t know how inheritance law and behaviour will respond to these announcements.

#Dilnot: a principle and a precedent

What today’s announcement of a £75k cap on the costs of social care does is allow the coalition government to say at the next election that it has introduced an historic change in social care funding that no government has previously been able to do.

Politically, that’s a substantial achievement.

Of course, there are significant questions and details that arise from a £75k level of the cap (or £61k in today’s prices, since the £75k figure is at 2017 prices) and associated changes. People like Claudia Wood and Marc Bush are highlighting what these questions are.

But there is a principle and a precedent that we should today celebrate.

The principle is that a cap has been placed on how much someone has to pay for social care. That is, the government has (finally) drawn a line beyond which individuals won’t have to go to meet care costs during their lifetime. (That this is being paid for by a freeze in inheritance tax allowance is an admittedly very tasty cherry on top.)

The precedent is that of top-up tuition fees. Once the principle of top-up tuition fees of up £3,000 a year was introduced in 2003, the question then became one of where the line is drawn. That line was changed to £9,000 top-up tuition fees last year, and will probably change again in the future.

In the context of the social care cap, I am hopeful the precedent will work the other way: that once government sees in practice what the effect of the costs cap is it can adjust the level accordingly.

The “win” today is therefore the principle that the £75k has been introduced; the precedent of top-up tuition fees is a reason for optimism.

A space to discuss the #Dilnot report

Tomorrow sees the publication of the Dilnot Commission’s report into the funding of care and support – a significant policy development for anyone interested in social care for people of all ages.

Discussion on Twitter has used the #dilnot hashtag for people’s thoughts and to share links/information regarding the Commission. I’ve also been using the dilnot tag for my (hopefully) comprehensive list of links relating to Dilnot on delicious.

This post aims to provide people with a space to discuss in more than 140 characters their thoughts, feelings and perspectives on the Dilnot report.

Of course, there will be plenty of debate in many different places, so there’s no particular reason why you should use just this post. Hopefully, though, it’s a useful place to start and you’ll join the debate.

I’ll update this page with responses from as many organisations and blogs as they are published – let me know any you think should be included.

By way of background, an excellent overview of the challenges Dilnot is seeking to address was written by Emma Stone at the Joseph Rowntree Foundation. A great overview of what social care is has been written by my good friend George Julian, and the King’s Fund’s social care pages are also fab.

Please do get stuck in!

Social care deferred payments (aka “Death Tax”): spot the difference competition

Here’s a fun game. See if you can spot the difference between the following proposals for funding social care.

This from the National Care Service White Paper last year (p137):

Under the comprehensive National Care Service, we will therefore introduce a universal deferred payment system[.] This means that no one will be force to sell their home in their lifetime[.]

Many local authorities already offer deferred payments, but it is not universal across England. We are therefore going to require local authorities to provide accessible deferred payment agreements to everyone who cannot afford to pay [without] using up the last of their savings and selling their homes.

This, of course, was the proposal that was labeled a “Death Tax”.

Here’s a likely proposal in the Dilnot report tomorrow, as reported in the Observer:

Local councils are poised to take on a major financial services role under proposed reforms to be unveiled on Monday of the funding system for the care of elderly and disabled people.

Under the scheme local authorities will be empowered to make a loan at a preferential rate against the value of a property owned by someone entering a care home. The loan would be redeemed on the sale of the property after the person dies.

And, just for fun, see if you can tell the difference between the two proposals above with the legislation that is already in place (this from footnote 108 from the Health Select Committee’s Social Care report in 2009/10):

Councils currently have the discretion, under section 55 of the Health and Social Care Act 2001, to offer a person who fails the means test on account of property assets a Deferred Payments Agreement[.] Where this is approved, the council continues to pay for care, effectively providing an interest-free loan that is repaid from the proceeds when the property is eventually sold (following termination of the agreement by the resident or after their death). The council can begin charging interest on the loan 56 days after the resident’s death.

Just to save you a little bit of time, I’ll let you in on a secret: in principle, the 3 proposals are exactly the same.

New Statesman on #Dilnot and #socialcare

This is a powerful leader from the New Statesman, ahead of the Dilnot Commission’s report on the funding of care and support.

It’s conclusion is spot on:

The government’s clumsy approach to public-sector pension reform has provoked the largest strike action in decades. It must show greater skill if it is to solve the care crisis. The longer ministers prevaricate, the worse the crisis will get. Should the coalition delay reform for political purposes, it will betray a generation of older people.

A set of comprehensive links regarding the Dilnot Commission is available here.

Revisiting the National Care Service White and Green Papers ahead of #Dilnot

At the end of March 2010, a White Paper on adult social care was published called “Building the National Care Service”. This was the result of the Big Care Debate and a Green Paper published in July 2009.

Ahead of the publication of the Dilnot Commission’s report on the funding of care and support, I thought it would be useful to revisit the key pledges made in the White Paper, concentrating mainly on the financial proposals it contained.

(Please note: I’m not making reference to the free personal care to people in their own homes part of the White Paper, since this was a bit of political opportunism just before the general election.)

Potential costs of social care

The average expected lifetime cost of care for a female 65-year-old is £40,400. Average expected lifetime cost of care for a male 65-year-old is £22,300. Average expected lifetime cost of care for all is therefore £31,700 (p125).

Around 20% of people will need care costing less than £1,000 during their retirement. Conversely, around 20% of people will need care costing more than £50,000 during their retirement. Some 5% of people will need care costing more than £100,000 (p45).

The Green Paper contains more detail on the potential cost profile (p98) as follows:

  • 22% of people will need care costing £0-£1,000
  • 26% costing £1,001-£25,000
  • 30% costing £25,001-£50,000
  • 16% costing £50,001-£100,000
  • 6% costing £100,001 or more.

Potential funding models

The pay-for-yourself option of funding care was ruled out on the basis it was unfair that individuals who could not afford to pay for care would go without. Similarly, funding care from general taxation was ruled out on the basis it would put too high a financial burden on the decreasing proportion of the working-age population (p126).

The Partnership option meant that everyone who qualified for care and support would be entitled to a set proportion (for example, a quarter or a third) of their assessed care and support costs paid for by the state. People who were less well-off would have more care paid for (for example, two thirds) while the least well-off would have continued to have all their care paid for free (p126). The rest would be paid for by the individual. This option received 35% support in the consultation process (p127). According to the prior Green Paper, a 65-year-old may need to pay on average between £20,000-£22,500 under the partnership option. The system would work for people of all ages (p17 of Green Paper).

The Insurance option would have built on the partnership option, offering everyone the opportunity for people to cover the additional costs of their care and support through insurance, if they wanted to do so (p126).  This option received 22% support in the consultation process (p127). According to the prior Green Paper, a 65-year-old may need to pay on average between £20,000-£25,000 under the insurance option. The system would work for people over retirement age (p17 of Green Paper).

The Comprehensive option would provide free care when people needed it for those who qualified for care and support, with everyone paying a compulsory contribution (p127). This option received 41% support in the consultation process (ibid). According to the prior Green Paper, a 65-year-old may need to pay on average between £17,000-£20,000 under the insurance option (p17 of Green Paper).

Preferred option and its implications

The White Paper rejected the Partnership and Insurance options, and opted for the Comprehensive option (p128). Partnership was rejected because it still left people exposed to “catastrophic” care costs (p128). Insurance was rejected because evidence from other countries suggested voluntary insurance schemes had low take-up (p129).

Accommodation costs were not considered in these recommendations (p137). A proposal was put forward for a “universal  deferred payment” system for accommodation costs in care.  This built on the fact many Councils already offer deferred payment schemes, but that this wasn’t universally available (p137). Its purpose was to stop the requirement for people to sell their homes to meet their accommodation costs, meaning that people with high incomes or savings would not necessarily have been eligible for the deferred payment scheme (p137).

Everyone would have been required to make a fair contribution to the social care system. The best method for achieving this would have been determined by a commission established to help reach consensus on the right ways of funding the system. The recommendations, if accepted by Ministers, would have been implemented in the Parliament from 2015 onwards (p10).

Disability benefits and eligibility

Any changes to Disability Living Allowance and Attendance Allowance were ruled out (p123).

Eligibility for the National Care Service will have been consistent across the country and enshrined in law. Assessments would have been portable across different areas and would have moved to be joined up across social care and disability assessments (pp88-89).

Reflections

Looking back at the Green and White papers it’s interesting to see that, though the way in which social care would be funded was set (i.e. the Comprehensive option), the exact limits for individual contributions were not given. Only a broad range – of £17,000-£20,000 under the Comprehensive option – was given, and the rest left to a commission to sort out.

It will be interesting to compare and contrast the recommendations of the Dilnot Commission with those broadly outlined by the Green and White Papers published during 2009-10.

It’s also intriguing to hypothesize if Andrew Dilnot would have been asked to convene his eponymous Commission come what may, irrespective of the result of the General Election in 2010.

Who said this about #socialcare and the #Dilnot commission?

Who said this about social care and the Dilnot Commission?

Urgent reform of the social care system is needed and the Government have made clear their commitment and determination to reach a fair and enduring settlement for the system for generations to come. We want a sustainable adult social care system that gives people the support and freedom to lead the life they choose, with dignity…

This will be [achieved] with legislation to establish a sustainable legal and financial framework for adult social care in this Parliament.

Yep (column 11WS).