Social care - who should pay?

Other than investing in a property or other major asset, how exactly does a person plan for the expense of a residential care home which may cost between £2,000-£4,000 a month?

I think there should be some sort of separate insurance scheme to which everybody (including retired people) contributes according to their income and assets (payable from estate after death if necessary). This to cover anybody who requires either care in the home or residential care - social or medical because I think it is very difficult to differentiate between these two types of need. I think it is unfair that only people who are unfortunate enough to need this sort of care should have practically all their assets used up while others are left untouched.

Some people will object to paying for something they may never need themselves but hopefully others will take the view that if they need the care it will be available and if they don't they are very fortunate - and their contribution has helped others.

Baggs Since you feel that nobody has an entitlement to inherit money, then presumably you would have no objection to the inheritance tax threshold being substantially lowered to ensure that enough money is available for everybody to receive proper care in old age if they need it?

I believe I read some time ago that the number of elderly people going into residential care is not as high as many people suppose - around 1 in 10 I think was quoted.

Paying a lower fee doesn't mean that you are subsidised by others - in the case of care homes it often means that you are enabling an organisation to continue to exist.

I worked for a number of years in a major private hospital - can't remember the exact figures but BUPA/PPP/etc patients would be charged say £100 per night but self-pay patients would be charged £700 per night, both excluding treatments.

You can't say that self-pay patients (high fees) were subsidising the insured (low fees) because without the insured patients the hospital wouldn't survive. It must be all factored in the business model.

As an economist Monica you must know how these things work.

How odd. I just googled the topic, this reference came up and I read it. I certainly do not have a subscription to the FT online (or in print).

Cari, yes, I those things that you mention but do wonder what people are supposed to do in regards to 'planning'.
Care homes and nursing homes cost so much money per month that very few I suspect have those kind of savings, so if we need care and have a home, that home will have to be sold ( if the wife/husband is not also living there) and a good part of the money put towards the cost.At the moment I think it doesn't leave much of the 'estate' for inheritance purposes, but so be it, if we need care.
There doesn't seem to be much else that can be done regards planning than this.
There are so many of our generation living longer, that it's very likely that home ownership will always have to be taken into consideration, or the burden will fall on taxpayers.

Subscription, Monica.
Can't even read the heading.

A report published this year supports the contention that self-funders subsidise state supported places. Its main heading is:
Room costs at least £600 a week but local authorities pay £486, study shows

www.ft.com/content/6c61fa30-f1dc-11e6-8758-6876151821a6

Monica you might find it

difficult to imagine a situation where a care home would fail without council funded patients, unless it was a home offering the lowest possible care, at the lowest prices.

Maybe you should check out some central London BUPA care homes - not known for lowest possible care.

Don't know what 'hopefully ' is in there!

It is a very complicated issue. Fees for many homes are in the £800-£1 K per person per week whoever they are run by. If both husband and wife need to go into a care home at the same time it must be a double nightmare. Even if the house is sold the proceeds from many homes would not fund two people for very long - what happens if the money runs out?
I believe many councils will only pay about £600 per person per week - so as you can easily see there is a shortfall of at least £200 per person per week. Not Many people have a pension large enough to cover that amount particularly if it hopefully is needed to cover two people - although everyone is assessed as an individual and not as a couple. What is the solution then ? - they have no assets and are older and need the care more than ever.

Monica do you think that private care homes would take council-funded residents if it wasn't financially viable?

Why do they not just decline to take them?

So what do you think happens in Durham, then, Monica, where there are no council run care homes?

Riverwalk It is a truth commonly acknowledged and research done and published that the amount paid by most councils for those in care is insufficient and does not cover the full cost of that care and that the prices paid by self-funding residents in those same homes are increased to cover the shortfall.

I find it difficult to imagine a situation where a care home would fail without council funded patients, unless it was a home offering the lowest possible care, at the lowest prices. What is much more frequent is that homes with a lot of socially funded residents depend on their self-funding patients to cover the loss they make on council funded residents, which is why so many homes no longer accept council funded patients.

The length of time between cradle and grave has increased, as has the number of people requiring support. I am angry that successive governments have failed to grasp this nettle.

I have to agree PensionPat. Rather like the pension mess for WASPI women, there is actually no excuse. It was obvious years ago and all along the way that this was going to be a problem. It does mean we have to support long term decisions when a government suggest them though and they obviously think we wont.

The problem with continuing to pay NI, M0nica, is that is that, other than a current small percentage of what we pay for NHS it is all hypothecated towards In Work Benefits and End of Work benefits (pension). It is a hypothecated tax and I do think such taxes hold government to account. This is why I suggest you take the insurance payments for the NHS out of NI and out of general taxation and have an Insurance that covers NHS and Care which you pay from the first day of work until you die.

My parents believed the NHS would take care of all their needs. I don't think 'social care' ever occurred to them. In the event none was needed, my father supported my physically disabled mother for many years. Her debilitating, terminal illness lasted for just two weeks and so we were able to provide for her needs at home. My father was self supporting until he needed hospice care. Lucky perhaps that dementia wasn't a part of their final years.

They were not home owners. Low income levels and basic pension were managed carefully to ensure savings were there for funeral costs. It was a matter of pride along with ensuring a small cash legacy.

So, has the increase in home ownership triggered a greater desire to leave a proportionally larger legacy for children? Along with this has there failed to be a mental separation of health and social care? Is there an 'it won't happen to me' in some people? Whatever the reason social care undoubtedly needs addressing.

Should families be expected to fund care for older relatives? Of course not but I imagine some will be able to and choose to in the same way some choose to pay for private medical care now.

Thinking back I cannot recall giving social care very much thought until about 30 years ago when it was hotly debated in my workplace - with regard to children rather than older adults. My conclusion then has changed little. The majority of family systems have changed, family care in the home is often simply not practical. Insurance seemed to be the way forward then as it does now. Insurance to be paid by everyone of whatever age who pay income tax. Will that help immediately? I wouldn't think so unless a pot of money can be found centrally, but it will help our grandchildren. There should be no means testing, it should be an insured right, care must be both available and consistent in quality. Pie in the sky? I suspect so but why not if appropriate value is placed on the provision.

Looking at it from another angle, as well as all the above points why has the cost risen so high?
If the cost was lower many more families would be able to contribute.
I have an idea it's to do with new legislation on H&S and employment law.
Speaking from experience of what we used to pay for my Mum in a very good small homely place, in the late '90s.
They eventually had to close for financial reasons

Monica someone who is self-financing in a care home is not directly subsidising a council-funded resident. There are so many variables. Many care homes would close if it were not for the fees from council-funded residents.

All residents would have, over their lifetime, paid taxes that provided the education of the care home nurses, and so on.

Along the lines of gym membership .... off-peak is cheaper but overall the gym operates for all members and perhaps wouldn't be viable without the cheaper off-peak members.

As a professional in this field, I know of many 'exclusive' central-London homes for 'gentlefolk' that would fold without their council-funded tenants.

Ya never know who'll be in the next room!

This is something I may have to face sooner rather than later.
When my H was first diagnosed with Alzheimer's I was younger and fitter and resolved this would not stop me caring for him. I am now 80 and not fit , I have one knee replaced and the other one and a hip need doing.
He just sits and is quite demanding. Our income and resources won't last long for care which we would have to fund. It worries me a lot. If I die first he would have to go into care, family could not cope. I have suggested that the house is let and along with income and savings may enable the house not to be sold ,but fees for patients with any form of dementia are horrendous.
I cannot give a solution ,I don't think there is one.

This is a political hot potato, and should not be so. This needs to be discussed across party lines, and with a long term view, not just to the next election and the next lot of votes to be won with fake promises and with held truths. We need someone respected on all sides of the house, someone like Frank Field who is not afraid to upset people with the truth and who is not afraid either to upset his own party at the risk of his own career. But, it needs to be acted on, not just talked about, discussed on Newsnight and then filed away with all the other 'lessons will be learnt' type Inquiries.

whitewave, I agree. I also see no reason why any pensioner paying tax should not continue to pay the health part of NI contributions after retirement as well. Pension payments end when we start drawing the pension, but the need for health care is continuous.

monica that is why an insurance makes so much sense

durhamjen I was merely informing the OP who was pointing out that self-financing residents often end up subsidising state funded residents in the same home, which is very unfair, that there are ways of avoiding doing that.

At no point did I suggest stigmatising anybody in a home that contains private and state-funded residents, nor did I even make any value judgement on my information.

All I did was give an objective statement of the facts.

Just like all insurance, pensionpat.
I pay insurance for my house, for my car, for my buildings, and have rarely had to use them.
I don't say it's not fair that I should pay for it because I have rarely had to use them; I am just grateful for it.

The length of time between cradle and grave has increased, as has the number of people requiring support. I am angry that successive governments have failed to grasp this nettle. I want to live in a society which supports the vulnerable. We have to pay into a system which is ring-fenced for future needs. If we never need to be cared for, we are winners.

... and while all are focussed on saving for their retirement none had thought about needing (and paying for) care at a future date.

When it was set up we were told the NHS would provide health care from the cradle to the grave. We were not told that it would not provide essential health care that allowed us to move, dress, eat or perhaps even more, we were not told we would not get care needed for mental health issues. I do believe if something like dementia attacked young people in the same numbers there would be an outcry about the lack of mental health and social care to support them - under the NHS!