The “dementia tax”

How did they miss the signs warning: “Danger – quicksand”, asked David Brindle in The Guardian. Social care is a notoriously difficult subject, treated by successive governments with a “curious mixture of incomprehension and disdain”. When Theresa May’s team was drafting the Tory manifesto, it must have seemed like a good idea to guarantee that pensioners in England would stop paying for their own care once their savings and assets are down to £100,000 (at present, only £23,250 is protected). If that meant a minority would have to take a financial hit, it “could be spun as a tough but stateswomanlike choice”. But within 100 hours of last week’s manifesto launch, “the policy lay in shreds”. Critics had dubbed it the “dementia tax”, and May performed a sharp U-turn, bringing back the idea of a spending cap on care costs – one her ministers had explicitly rejected only hours earlier.

The manifesto proposal sounded generous, said Nick Triggle on BBC News online. But “large numbers” would have lost out. At present, anyone who is in a care home and has assets of £23,250 or more is expected to pay the full cost of their care. But if you receive care in your own home, only your savings and income, rather than property, is taken into account. The manifesto changes that: the value of your home would be taken into account, no matter where you receive your care. Nearly three times as many people get help from their local council in the community as in a care home. Three-quarters of people over the age of 65 are homeowners, and the average value of a property in England is £233,000. “You don’t need to be a maths genius” to see that, as a result, many would be hit with substantial care costs. I don’t see what’s wrong with that, said Libby Purves in The Times. The “bald and boring fact” is that care costs a lot of money. This is “more justly funded by the accumulated wealth of elderly individuals than by the tax bills of younger families”. Under May’s plan, care bills would be deducted from people’s estates after death. The “affluent middle” call this “a tax on inheritance”. So what? Why should other people’s taxes subsidise your inheritance?

The thing is, “the manner of death is not in anyone’s hands”, said Will Hutton in The Observer. Most die without requiring much care. But for the unlucky 10%, bills climb above £100,000. In a civilised society, we would “collectively insure ourselves” against these massive losses – which is why David Cameron’s plan, designed by the economist Andrew Dilnot, was to have an overall spending cap, of £72,000. May initially rejected this, and has now reinstated it, without saying at what level it will be set, said John Rentoul in The Independent. So now she has both a raised spending floor, and a cap – which, at whatever level, will be a subsidy from the taxpayer to “rich pensioners”. She has made “a bad policy worse”, and has managed to “scare and confuse” voters into the bargain.