Insurance policy for social care
EGOVERNMENTS of all persuasions have ducked reforming social care so, while Boris Johnson should be praised for keeping his promise to tackle the issue in this Parliament, the bloody nose he got last week as his own MPs voted against him or refused to vote at all shows just how complicated introducing changes to the social care system can be.
The problem, it seems, for politicians of all parties is that the social care system poses two competing challenges – first, the pressure on social care budgets, and, second, how to protect homeowners who might otherwise have to sell.
Boris has tried to do a bit of both. He taxed us more in September, to the tune of £12billion, with a National Insurance contribution rise, and now he has reduced the amount the individual is liable to pay on social care.
Those with less than £20,000 of assets won’t contribute to their social care costs (up from £14,250); those with assets up to £100,000 will get some support (up from £23,250); and a cap of £86,000 has been introduced at which you don’t need to pay any more towards your care.
However, at the last minute, what constituted the £86,000 was changed – it was what you “personally contributed” and not any of the “means tested” contribution. By removing the “progressive element” of the social care reforms it would penalise those with lower priced homes, basically those in the north, where £86,000 could take out a fair chunk of the value of your home.The truth is, tinkering at the edges of our broken social care system won’t solve the problem.While some extra support was given, some new unfairnesses were introduced into an increasingly complicated system, hence the need for fresh thinking and new ideas.
It is time to look at an insurance policy. Figures show just one in four people who reach pension age go into a nursing home. Those who do so stay for an average of two and a half years.
The typical cost for social care (excluding living costs) is £25,000 per year. Financial experts estimate a single premium of £16,000 would cover all social care costs, irrespective of how long you need that care. Nobody would be forced to take out the policy, but if you didn’t you’d end up having to pay more than this reduced pooled level.
It would need to be a statebacked insurance policy, not least because uncertainty of future government policy would deter the private sector from taking part.Although once the system matures, it would be preferable if it moved to the private sector.
This might not be everyone’s solution – but we haven’t even had the opportunity to debate such alternatives, which we must.
The proposals on social care need a major rethink – the Government’s current proposals are not the right solution.
ETHANK goodness for Lord Frost, saying what many of us have been thinking for a while – we need to reduce taxes.
His message was that if we don’t reduce taxes and employment regulations as well as stratospheric welfare spending, and instead continue to stick to the European model we’re currently following, we will end up squandering the opportunities of Brexit. Known as Frosty to his friends, with such frank speaking, I wonder if his relationship with the Chancellor will now get a little bit chilly.