Anger at tax on working beyond the pension age

CAMPAIGNERS last night slammed proposals to force people working beyond the state pension age to start paying national insurance.

Nearly 1.3 million so-called “silver strivers” could be in line for the crippling tax hike being considered by Health Secretary Jeremy Hunt to raise extra funds for the crisis-hit social care system, it emerged yesterday.

Around £2billion a year could be raised by imposing the 12 per cent “care tax” levy on earnings under the plan drawn up as part of a package of measures drafted to provide more support for the frail elderly and other vulnerable adults.

Unfair

But Tory peer Baroness Altmann, a former pensions minister, said: “Trying to fund social care by raising national insurance on pensioners who are working would be utterly unfair.

“It is not right to single out one group of people, many of whom are not even that well off, and force them to pay for the social care of everybody else.

“Many of these people are only working because their pensions are so low they cannot make ends meet.”

Sh said Tory support was dented in last year’s general election after the party’s manifesto proposal to raise care costs. She added: “Social care is a national issue that needs to be tackled with a national solution through the tax system.”

She also believed the plan would be a disincentive for people over retirement age to carry on working, which had been shown to have many health benefits. Last night Tory sources distanced Mrs May from the plan.

But Neil Duncan-Jordan, of the National Pensioners’ Convention, said: “If you’re going out to work and earning above the threshold, then you should pay national insurance whether you’re 18 or 88. But this won’t raise anywhere near enough to fix the problems in social care.”

Mr Hunt is understood to have made his proposal in a “green paper” discussion document. The plan is set to be backed in a report tomorrow by the Intergenerational Commission, an independent inquiry into fairness between age groups.

Its chairman Lord Willetts, a Tory ex-minister, said: “If you have a 67-yearold working alongside a 57-year-old doing the same job for the same pay, do we really say the 67-year-old should take home more and have lower deductions?”

The Department of Health and Social Care said: “We will shortly outline the Government’s plans to reform social care to ensure it is sustainable for the future.”

THEY are known as “silver strivers”, those over the age of 65 who carry on working. Their numbers have grown to 1.28 million since 2011 when the Government scrapped the default retirement age.

At the moment the over-65s no longer have to pay national insurance. In a Green Paper on care and support for older people, which is to be published next month by Health Secretary Jeremy Hunt, it is expected that there will be a suggestion that these workers go on paying NI. This would raise £2billion a year and go some way to meeting the shortfall in care funding.

It is of course true that older people are the greatest users of the NHS and social care. But they have already paid NI throughout their working lives and there is plenty of evidence to show that the surge in older workers is beneficial to the economy as it will ultimately reduce the benefits bill.

Pensions expert Baroness Altmann has said: “If on average older people delay retirement by one year this adds around £16 billion to our economy.” Why therefore should these older workers be penalised for contributing so much?

Older women have also had to put up with seeing their pension age pushed back due to a change in the law. If this suggestion about NI is made reality then they are being punished again.

What’s more, while some people over 65 work because they want to, many others work because they have to. It is not fair that they should see their take-home pay cut in this way.