Sell your home to fund care? I’ll stop all that, vows Hancock
Matt Hancock today vows to end the scandal of pensioners being forced to sell their home to pay for old age care.
Launching one of the first major policy initiatives of the tory leadership campaign, the Health Secretary calls for a state-backed insurance scheme.
this would cover potentially ruinous care costs and remove the risk of being unable to pass on the family home.
In an interview with the Daily Mail, Mr Hancock said the social care system was unsustainable and unfair.
the idea for an insurance scheme is the centre-piece of the Government’s longdelayed ‘green paper’ on social care, which has been held up for a year by wrangling between Downing Street and the treasury over costs.
Mr Hancock, who formally launches his bid to succeed theresa May as prime minister this morning, has now adopted it as a ‘priority’ for his own campaign.
a relative outsider in the leadership race, he is expected to retain a top Cabinet job, possibly as chancellor.
today he also pledges a £3.5billion cash injection to help stave off collapse in the social care system.
‘the sign of a civilised society is how we treat the most vulnerable and our social care system is not up to scratch,’ he says. ‘the system is unsustainable.
‘People are getting older – that is a good thing – but there isn’t enough funding in the system.
‘and there’s a whole number of injustices. One of the biggest injustices is that for people who worked hard all their lives and have put money aside – the system penalises them and won’t fund their care without them having to sell the house, whereas people who haven’t put money aside get their care supported. I think this is very unfair.’
Previous attempts to persuade the insurance market to offer cover for social care costs have failed because of the potential size and unpredictability of the bills involved.
While a quarter of people will die before incurring any care costs, another 10 per cent will rack up costs of more than £100,000, in some cases many times that.
Mr Hancock describes the situation as ‘the greatest financial lottery we face’ and said there was a clear ‘ role for government’ in providing insurance that the market will not offer.
Costs are to be determined by a detailed consultation, but insurance premiums would not be cheap.
Mr Hancock says workers would have to fund a scheme able to cover average lifetime care costs of around £40,000 – more if they wanted to also cover potential residential costs.
He stresses that the payments could be made over many years of a working life.
Last year he said he was ‘attracted to’ a scheme that would require all workers over 40 to contribute 2.5 per cent of their wages. the idea is based on the German model. there, an adult on a £27,000 salary pays about £675 a year, while those earning £50,000 pay up to £1,250.
But Mr Hancock has concluded that making the scheme compulsory would be too politically contentious without crossparty consensus – something he believes is impossible with a Labour Party led by Jeremy Corbyn.
as a result the scheme will begin life as a voluntary one.
‘I’d like to see people encouraged to take it out when they get their first mortgage – that being the point where many people buy life insurance,’ he says.
Individuals needing care have to fund their own costs if they have assets of more than £23,250.
In practice, this means that many with long-term needs have to sell the family home, wrecking their plans to pass something on to their children. the insurance scheme would do away with previous Conservative proposals to put a lifetime cap on care costs.
Mr Hancock says the cap was too hard to calculate and left families exposed to ‘huge financial risk’.
He describes the issue of keeping the family home out of the care trap as ‘very personal to me’, citing the example of his own father, who was born in a council house and worked hard to buy his own home.
‘the way he sees himself is entirely defined by the fact he’s a homeowner. the idea that he should have to sell his home because he did the right thing and saved and put money aside for the next generation undermines all the values we should stand for as a country,’ he said.
the creaking care system has received a number of ‘sticking plaster’ cash injections, including £650million this year, to prevent it collapsing.
But Mr Hancock acknowledges that ‘we can’t go on with one year at a time top-ups’ and said he would seek an extra £3.5billion in the next spending review. He said Britain had to do much more to allow older people to receive care in their own homes. and he said carers needed to be given more support.
Mr Hancock will launch his campaign today by stressing his probusiness credentials and making an appeal for the tories to do much more to attract younger voters.
He tells the Mail that his first act as prime minister will be to ‘deliver Brexit’.
He says conversations with senior EU figures have convinced him it is possible to reform Mrs May’s Brexit deal by building a time limit or escape clause into the controversial Irish backstop.
He also says his experience at the Department for Health has convinced him of the need to allow ‘free movement for medics’.
But he argues that migrants wanting to acquire British citizenship should have to clear a higher hurdle, and demonstrate that they are fully signed up to this country’s values.
‘Worked hard all their lives’