Over-40s may pay extra tax to fund their care in old age
Chief Secretary to the Treasury
WHEN the Prime Minister addressed the nation on the steps of Downing Street after winning the election, he promised to level up opportunities in this country so that no matter where you live, you can succeed.
At our Budget this Wednesday, we will ensure that someone in Teesside has the same opportunities to unlock their talents as someone in Twickenham.
We are already kickstarting a transport and infrastructure revolution. This includes a £5billion package to transform buses and cycling provision across the country, as well as committing to HS2 to boost North-South rail links, unleashing the economy in the North.
Potential
People outside London and the Southeast often feel they are not getting a fair chance, not receiving the investment that they deserve.
We must deliver for them now. And that is exactly what we’re doing. This means investing in transport to ensure that towns and cities in every region have the modern, joined-up network needed to fire up economic growth.
It means investing in high-quality roads and broadband. This means investing in skills and education.
It means lowering the cost of living for hard-working families and investing in worldclass public services.
All parts of the UK are equally as important, and we will ensure all areas have the powers and funding that they need to succeed.
We believe in investing across the UK to unleash our potential.
MIDDLE-aged workers could be forced to pay a social care tax to cover illness in old age.
Under plans being looked at by the Prime Minister, all employees aged 40 and over would pay a fixed levy of around 2.5 per cent of their wages.
The reform of the social care system – which currently sees pensioners forced to sell their homes to pay bills of around £750 a week – would be based on the German system.
Health Secretary Matt Hancock said: “We need action now, finally, to seek a solution that can support future generations.” This would involve the over-40s paying into a pot, which would be handed out in cash payments to the elderly and disabled receiving care.
It would not eliminate the possibility of people having to sell their homes to pay for residential care. But it could reduce the chances of this by allowing elderly people to pay family members and carers to look after them in their own homes instead.
Critics say the levy may have to rise to between 4.5 and 6.5 per cent over the next 30 years to meet the rising costs of an ageing population.
Under the existing system in England, only people who have less than £23,250 in savings – and are deemed to require considerable help – qualify for councilfunded care. This figure has stayed the same since 2010. For those looking to move into a care home, the value of their house is taken into account when calculating how much help they can get.
Other people rely on the free labour of family and friends, with an estimated 6.5 million unpaid carers in the UK.
Mr Hancock, who has said he is “attracted” to the 2.5 per cent levy, wrote to all MPs and peers last week asking for an all-party agreement to resolve the social care scandal.
In real terms, funding has been reduced by £700million a year since 2010, according to health think tank The King’s Fund.
Shadow social care minister Barbara Keeley said: “The process outlined by Matt Hancock is another consultation that provides no help to a system in crisis.”
Labour wants to see all pensioners offered non-means tested personal care. This is already in place in Scotland, which makes some help with washing, dressing, meals and medicines available to everyone for free.
The cost of that plan for England would be an estimated £7.9billion a year by 2030/2031.