Government to set £75,000 cap on care costs for elderly
The Government will today announce that elderly care bills are to be capped by the state in a £1 billion move expected to be funded by dragging more people into inheritance tax.
To the disappointment of many campaigners, the cap will be set at £75,000 – more than double the £35,000 recommended by the independent Dilnot Commission.
But thousands more people will be hit with inheritance tax bills because of a three-year extension of the freeze in the £325,000 threshold – £650,000 for couples – at which it kicks in at 40 per cent.
Alongside the cap, Health Secretary Jeremy Hunt is to announce a large rise in the assets threshold beneath which people receive means-tested support meeting care bills. Currently £23,250, that is set to rise to £123,000.
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Mr Hunt said: “The point of what we are doing is to protect people’s inheritance. The worst thing that can happen is that at the most vulnerable moment in your life you lose the thing you worked hard for, that you saved for, your own house.”
Speaking on BBC1’s Andrew Marr Show, he said the current situation was a “scandal” in which 30,000 to 40,000 people a year have to sell their houses to cover care costs.
The National Pensioners Convention described the social care reforms as “about as credible as a Findus lasagne”. General secretary Dot Gibson said: “The social care system needs urgent and radical reform, but these proposals simply tinker at the edges.
"The current system is dogged by means-testing, a postcode lottery of charges, a rationing of services and poor standards and nothing in the plan looks like it will address any of these concerns. Setting a lifetime cap on care costs of £75,000 will help just 10% of those needing care, whilst the majority will be left to struggle on with a third rate service. The Government needs to be much braver and bolder.”
Shadow care and older people’s minister Liz Kendall said a “bigger and bolder response” was needed. She said: “Andrew Dilnot recommended a cap on care costs of £35,000 and warned that anything above £50,000 won’t provide adequate protection for people with low incomes and low wealth.”
Stephen Gay, the Association of British Insurers’ director of life, savings and protection, said: “This is potentially another positive step forward in tackling the challenges of an ageing society. The cap and the higher means test give people greater certainty.”
David Rogers, chair of the Local Government Association’s community wellbeing board, said: “We’re concerned the cap alone – which at £75,000 is considerably higher than the independent commission’s recommendation of between £25,000 and £50,000 – won’t address these issues.”