Pay into social care fund like you do with pension, says minister
WORKERS could in future be expected to contribute every month from their salaries towards the cost of their care in old age.
Matt Hancock, the Health Secretary, is looking at a new ‘opt-out’ social care plan modelled on the auto-enrolment scheme for pensions.
He said yesterday that he wants to see people taking more ‘personal responsibility’ for their health and care.
The plan would mean every adult in England would be expected to have money deducted from their pay to cover costs in later life.
The contributions would be paid to insurance firms to cover care home fees and home help when they are older.
People would be able to opt out of the scheme, just as they can currently opt out of contributing to a pensions savings pot.
The plan is expected to form
‘It takes away the injustice’
part of a much- delayed Green Paper on social care, expected in the autumn.
At present, under England’s broken care system, people have to pay the full cost of residential care down to their final £23,250.
The issue of social care dominated the last general election and contributed to the loss of Theresa May’s majority.
The Tories’ 2017 manifesto pledged to extend the current system so money could be taken from assets to fund home as well as residential care – a plan nicknamed the ‘dementia tax’.
The manifesto also dropped plans for a cap on the amount people have to pay towards their care – although that promise has since been reinstated. The task of reforming social care has been passed to Mr Hancock, who became Health and Social Care Secretary in July in the wake of Jeremy Hunt’s move to the Foreign Office.
He said major changes were required to cope with the rising number of elderly people needing care – and to address the injustices of the current system.
‘I’m attracted to the model of auto-enrolment, which has been so successful in pensions,’ he told The Daily Telegraph.
‘If you make it the norm... it’s often the case that very few people will opt out. It takes away the injustice of people losing all that they have saved for.’
Full details of the proposed social care funding scheme have not been drawn up, but Ministers claim it would mean an end to the crippling care costs. Those opting out would face the same risks as now, including being forced to sell their home.
The opt-out element would enable the Tories to sidestep the charge that they were imposing a ‘death tax’ to pay for social care.
However, workers in their 50s may have to pay more than those in their 20s so they can build up a big enough fund. And the proposals do not address the care needs of those past retirement.
Former pensions minister Baroness Altmann said: ‘This could be part of a long-term solution for younger generations.
‘Older people are already retired and will need care soonest. There is no silver bullet.’
Average care costs are £25,000, but one in 10 face ‘catastrophic’ costs of more than £100,000.