The Conservative manifesto announcement of making elderly people use assets of their property above £100,000 to pay for care in their own homes on the face of it sounds reasonable. Why shouldn’t people with thousands locked up in property contribute to the costs of their care?
But on deeper examination it is a profoundly unfair proposal and there are better and fairer ways of realizing the aim of unlocking property assets to contribute to care costs.
The warning bell has been sounded by the respected economist Sir Andrew Dilnot whom the coalition government appointed to review social care in 2011. Dilnot said the new Tory plans are unfair because they don’t allow the pooling of risk. If you live to a ripe old age with no social care needs then you won’t have to pay anything into the system and can pass on the full value of your property to any offspring. If you are, say, 65, living in a house worth more than £100,000 – which includes the majority of home owners – and suffer a catastrophic stroke requiring years of care then you could spend hundreds of thousands of pounds on your care in your lifetime. Two people, each living in a house of the same value: one was unlucky and the other lucky; one forked out thousands and the other nothing.
If one considers, by contrast, the principles underpinning the NHS, we see that the NHS completely removes the financial fear of being unlucky enough to be ill. This was what Bevan, the founder of the NHS, advocated in his famous book “In Place of Fear”. The interesting thing here is something that is not often considered in discussions on equity within the NHS – it’s not just free care for the less well off; it’s free care for the better off too. And why not? As long as we have a progressive taxation system the better off have paid more in and therefore should not feel bad about using the NHS. Illness is a leveler and at times of trouble everyone is treated and cared for the same in the NHS. That is what is so great about the NHS and also explains the considerable “buy in” across society to keep the NHS going.
In contrast social care is treated completely differently. Here risk is not pooled. You are the victim of fortune. If you are unlucky enough to have severe illness that requires care then, unless you have a low income and few savings, you have to pay for it yourself. The irony is that the people who have high social care needs do so precisely because of illness: it is those who have had a severe stroke, disabling heart, respiratory, musculo-skeletal or neurological disease who will have the greatest care needs and therefore costs. Social care is just another form of health care , but it has been cleverly separated from health care so it does not have to comply with any of the principles of the NHS: care free at the point of need with costs pooled by society and paid into according to ability to pay.
But, you could argue, why shouldn’t wealthy people in homes worth thousands pay some of that into the system? They should, but there are better and fairer ways of realising those resources than trying to extract money from them at a time of great anxiety anyway – when someone has become ill and disabled enough to require care. Increasing inheritance tax is one way of fairly and progressively getting money into the system that could pay towards the costs of health and social care for all. Additionally increasing taxation, in a progressive way so the better off pay more, would also bring more money in. It would mean that people would be paying into the costs of their future care through their lifetimes and not having to face it all at once at a time of great anxiety and vulnerability, or it would be collected via inheritance tax after they died. Both ways avoid the anxiety and bureaucracy of sorting out paying for care at exactly the same time that crisis has befallen. It would also avoid the individualization of costs and the penalization of those unlucky enough to have greater care needs, sharing the cost across society on exactly the same principle of social solidarity as the NHS.
And collected via the Treasury from taxation uses a tried and true method of distributing resources without the need for recourse to the inevitably rip-off “products” that the banks will create to relieve people of their equity.
The Tories hate inheritance tax – they called it a death tax – but at least it is fair. This new Tory “illness tax” will place the burden of paying for misfortune on the individual and that is fundamentally unfair.
The National Health Action Party proposes that personal social care should be free at the point of need and funded through taxation. It should be integrated with health care because it is impossible to separate the two and this would lead to a better and more seamless experience for those who require care.