Middle class pay £8,000 a year towards costs of care for the poor

MIDDLE class care home residents are paying an annual £8,000 ‘care tax’ to subsidise those whose bills are met by the taxpayer, a report reveals. The elderly who have saved throughout their lives are increasingly meeting shortfalls in the crisis-hit state care system, it said. In total, privately-funded residents are being forced to shell out around £150 a week to plug the estimated £1.3billion funding gap.

The report, by care industry analysts LaingBuisson, said councils typically pay care home operators £100 a week too little towards the real cost of a place for a state-funded resident. Since six in ten places are funded by town halls, operators have no choice but to take the money.

However, they make up the shortfall by charging more to vulnerable residents and their families who pay their own bills. The report said that in England residential care homes with average staffing and pay levels need to charge between £590 and £648 a week.

But local authorities are paying just £486 a week – £104 below the minimum costs for home operators. Filling the gap costs more than 160,000 care home residents who pay their own bills around £8,000 a year each, said the report – more than £150 a week.

LaingBuisson chief executive William Laing said: ‘The entire care home sector for older people is being kept afloat through cross subsidies from the 40 per cent of care home residents who pay privately.’ He said the estimate of the total care cost shortfall of £1.3billion was ‘conservative’ and added: ‘This can be viewed as a care tax that Government and councils are content to see private payers contributing to keep mixed funding homes in business. The report also examined the workings of the hugely unpopular means-test system that decides who pays care home bills. Rules dictate that anyone with savings or property worth more than £23,500 must cover their own costs. Those with less have their bills paid by town halls. It means that those who have worked and who have savings or own their own home must pay bills that can run in some areas to £1,000 a week. If they own a home, council social workers have the power to sell it and use the proceeds to pay their care bills. As a result, families are stripped of their inheritance.

David Cameron promised to ease the burden by capping fees at £72,000, but its introduction has been delayed until at least 2020.

Yesterday charities said the burden of subsidising the state with a ‘care tax’ added another layer of unfairness.

Caroline Abrahams, of Age UK, said: ‘More and more older people are paying their own care home fees and they are increasingly at risk of a raw deal because they are propping up a system that is seriously underfunded. It’s an utterly miserable situation and, as we can all see, one that is now undermining the NHS.’

Margaret Willcox, of the Association of Directors of Adult Social Services, said: ‘Without significant, sustainable and long-term funding, the funding crisis means thousands... will face an increasing struggle to get the care and support they need.’

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‘Propping up the system’