Means Testing and Social Care Funding

Community Care reports that  Dilnot who is chairing the latest in a long, long line of consultations into care funding has heard overwhelming opposition to retaining the £23,000 savings threshold before people have to start paying towards their social care needs.

Charges for social care are a delicate political issue so not content with one report, each government seems to want to commission a dozen until they find one that says what they want to say politically.

As someone who doesn’t have any ideological issues with means-testing, I find the constant pushing of limits hard to understand.

If someone has money, surely they can and should pay for a service and if someone doesn’t have the money, the state should subsidise. Seems quite a good system.

That’s not to say there aren’t problems with the system as it is at the moment. There are lots. It is overcomplicated for a start. There is an element of the ‘postcode lottery’ about it.

The costs are increasing rapidly and, this is the rub, no-one wants to pay for social care. No-one. Whether they have £50 in the bank or £5000 or £5000000 – people have become used to receiving health care free and seem to make assumptions about the provision of social care on the same basis until they are actually made aware of the costs involved.

One of the most perfidious arguments I come across is the ‘I/my mother/my gran worked hard all her life so why should she pay when Mr Brown who has been on benefits all his life doesn’t?’.

Perhaps because you/your mother/your gran actually have the money to pay and Mr Brown doesn’t.

There is a lot of righteous indignation around in this country with people measuring what they have against what others have and what they get against what others get and seeing things as ‘unfair’. Unfair is a government that gives those who ‘have’ a free ride even if they have assets in the hundreds of thousands and restrict access to services for people who have the same and higher needs and fewer assets to pay for them.

Maybe you would prefer Mr Brown’s life of poverty on benefits or in a low paid job to your life where you’ve received a dignified wage and been able to save?

Or does it all come down to stamping ones’ foot and wanting to save your children’s inheritance?

I know this isn’t a popular view. Certainly Dilnot is going to reject it. The thought of – gasp – having to pay for social care if you have savings is such an anathema to the middle classes who have the loudest voices in the political process that it seems already to have been summarily dismissed out of hand.

The thought of having to sell the home to pay for care has been put up as the massive failing in the current system. Is it a failing? I’m not sure. The houses are are discounted from the sums if there is a partner who is disabled or over 60 living in them.

A charge can be put on the home by the local authority so the sale can be delayed until after the death of the person in question. Rental charges can be used to pay towards care fees if the family doesn’t want to sell the home.

Anyway, that’s likely to change because the home-owning electorate don’t like to pay for care for their parents when Mr Brown-on-benefits my be getting something for free.

One thing I am in favour of though, is the capping of care costs at a certain level if someone has very high needs. We used to have this in the local authority but as we’ve moved into more austere times, it has been abolished. While I think means testing is, by its nature, fairer, I don’t think anyone should be penalised if they have extremely high care needs.

The problem of course is that if people who have funds won’t and don’t pay – then who will? Why the state of course. Perhaps through the hideously conceived ‘insurance’ policies that the Conservatives dreamt-up pre-election which showed an ignorance of the details of care but could ‘insure’ someone with a lump sum payment (£8000 was suggested)  against care home costs in the future.  Another of Lansley’s gems. We really are seeing the measure of the man now.

I’ll be following Dilnot’s recommendations with interest. Just as I’ve tried to follow the very frequent and oft ignored proposals that have popped up again and again about the funding of long term care until the music stops and the government decides on the one that will win the most votes for them.

It’s a shame that so many games are being played in the name of ‘fairness’ where ‘fairness’ seems to only be referring to the wealthier, home-owning middle classes – but that’s where the votes are.

Cynical? Well, perhaps just a little bit!

9 thoughts on “Means Testing and Social Care Funding

  1. I’m going to disagree with you here, cb. The issue here isn’t that people like myself object to paying for social care – what we object to is paying twice. What has happened to all the money that my mum,dad and the baby boomer generation paid into the system? Why isn’t it adequate for our needs and others? What else is it being spent on apart from social care? Is it going into the pockets of bankers, or Southern Cross for example? There’s a basic breach of trust involved that we are being sold the idea of paying National Insurance so that we can have recourse to it when things are hard and then finding that it’s not there when we need it. And this is going to become a real issue if the Health bill gets up and running. The NHS budget is going to be handed to private companies via GP practices that are owned by the likes of United Health. If they take a slice of that money for their shareholders and refuse me treatment that in their view is too expensive for them to make a profit, then who do I have recourse to?

  2. I have to say, I can’t get my head around the government’s voluntary insurance plans. Assuming (as I do) that as a country we have moral and legal obligations to ensure that people are supported to a basic standard if they have care needs – rather than leaving them to suffer horrendous and expensive health complications and untold misery – I’m perplexed as to what will happen to people who don’t opt into the proposed insurance system. Now, obviously, you could argue that they have been selfish and foolish, but at the end of the day if you’ve seen what happens to people who have serious unmet care needs that still can’t justify leaving them to suffer serious physical and mental harm for their mistake. And if the state is going to pick up the tab for them anyway, then understandably those who have ‘opted in’ will feel resentful – particularly if those who could have afforded to pay for care chose not to.

    My personal preference is for an inheritance tax. By the end of a person’s life, many will have accrued considerable capital – often locked in homes – why shouldn’t this pay for their care? I can definitely see CB’s point over savings and house sales, but working in care I saw too many families who scrimped on their older relations’ care costs because they had half an eye on their diminishing inheritance. It wasn’t unusual to see people whose care was funded by the state receiving better support than those who were self-funding. There’s also this horror story, which I’m sure isn’t an isolated example, of families providing dangerously poor care at home because the house they are living in will be sold from under them if their relation goes into a care home:

  3. I’m not in favour of voluntary insurance; this has been tried in Germany with healthcare and has been an absolute disaster, with health funds being left short and those who opted out with inadequate insurance. But I would be in favour of ringfencing National Insurance contributions so that it’s spent on social care and nothing else. Otherwise it just becomes a slush fund for the government to spend on what they like and then call us mean and selfish if we object to them charging twice to compensate.

  4. Julie – I think we can agree to disagree at this point. I don’t see that NI was ever meant to be an insurance for self but rather an national insurance so that those paying contributions now are paying for those that need the support now rather than ‘saving up’ for their own needs in the future. Insurance is an unfortunate term for a tax that has never been an ‘insurance’ in the true sense of the world. The problem with this is that it creates a sense of entitlement for free services that cannot realistically exist. Don’t get me wrong, I’d love all services to be free but then, there would be broader coverage if those who can contribute, do.
    Lucy – I was in favour of the so-called ‘death tax’ to be honest and I think more taxation on inheritance tax creates a more equitable society in general but I know that is a very unpopular view! I have almost come to blows with my best friend over this point!
    And I think my views are, like yours, shared by some of the avaricious behaviours that I’ve seen over the years. I know not everyone is out to save their own inheritances at all cost but when you’ve seen some of the situations I’ve seen, you get a little jaded.

  5. Interesting post.

    A question though to start with: I think (and I could be wrong) that I have heard you defend universal benefits in the past- am I right in that? If so then is then where do you see the differences (means testing good for care but bad for some benefits)?

    I understand completely the underlying “if you’ve got money then you should pay” argument but I don’t think the counter argument is always presented as one of working v benefits but rather as savers v spenders – i.e. two people with broadly the same income – one saves hard for their old age, the other doesn’t- it inevitably leads to the former feeling resentment if they can’t then enjoy a higher standard of living when they are older.

    In my view, I think it would best for services to be paid for from taxation – either general taxation or inheritance tax. I really struggle to understand some of the resistance to inheritance tax – in most people’s cases the significant value passed down is the value of their house, most of which will have come about from property prices going up whilst they own it, and as such it will never have been taxed.

    Ideally I suppose it would be like health and education – the state provides for free the service to everyone regardless of their needs. If you want to opt out then you can but you don’t get your money back from the state. But I think that would be wishful thinking. It does seem troubling though that because someone has higher needs then they should be significantly worse off than their comparatively healthy piers.

    Sorry, it’s early, so I’ve just rambled a bit, but hopefully you get my points!

    • Ideally, I’d want a system where there is free care for all on the same basis as, like you say, health and education. While I am generally in favour of universal benefits, I am not in favour of all universal benefits but I accept that I might be irrational at times. I’d have to check back what I actually wrote about that. I also change my mind sometimes!
      You’ve got a good point about the spenders v savers issue. That is much harder to argue than poverty v wealth – high earner v low earner. I guess it’s always easy to oversimplify and I am happy to admit that my attitudes are coloured by some really unpleasant experiences with families that are over-eager to get their hands on money/property that could have been spent on much better care. I know that isn’t the representative sample but I also struggle to understand why there is so much resistance to paying for care (means-tested).
      Theoretically DLA/AA are provided to meet care needs (non-means tested) but that rarely happens in practice as relates to care costs.

      I am though, in favour of a cap on care costs and inheritance tax would be my favoured method but it’s not going to happen.
      A bit rambly, I’ll try and make my thoughts a bit more coherent and come back to it!

  6. Hi cb,

    There’s no such thing as free care. We pay for it through national insurance. That’s my point. We pay and then when we get old, we are told that we have to pay again, because hey! we paid already which means we can afford it. Whereas those who don’t pay anything at all, get it free. You are correct in saying that National insurance has turned into a tax, but it wasn’t always like that. Varying levels of stamp duty for example and not being eligible for unemployment benefit if you hadn’t paid contributions are examples. And I’ll ask again; where has the money gone? This is important because we are entering a new era of healthcare where the Secretary of State for Health is going to be a health care insurer rather than a health care deliverer and consortia are going to decide how much of that insurance is spent on your healthcare and how much on their profits. And now I’m rambling. I think I need to do a post on this..

  7. Thanks Julie – and my point is that National Insurance isn’t insurance at all. Our NI payments are to pay for current pensioners and those who have needs – it is not an insurance against our future needs and that is the problem with it being called National Insurance. I wish it were.
    As for where the money has gone – well, many answers but basically, it was never intended that NI would be saved to pay for future needs.

  8. Just like to make a couple of points. 1)Home owning middle classes are going to be even less keen to loose any possible inheritance from houses they own as they will want to use it to pay off the huge debts their children will build up if they go to university. Also perhaps to give their children money so they can get on the housing ladder. As many wont get jobs they will need help, and even if they do they will need help!
    2) There is approx 120 billion out there in unpaid/evaded/avoided tax, could be quite a contribution to care bills.
    A Robin Hood Tax could bring in 20 billion a year in the UK, some to be used to help fight climate change abroad but some to be used in UK for such things as health and social care.
    4) We currently live in a very very unequal society and until that is addressed I guess many will feel rightly that the system is unfair and why should they pay anything.
    5) A government with the political guts and will to address these issues would be nice.

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