Paying for social care - good news or bad news?

As I see it we have two choices for this sort of model. We either add NHS and Care into NI or we have a separate NH&CI

I would like to see the second option. But would like it to be a lifetime insurance where everybody paid for life, based on their income and the value of their assets, with an agreed basic untouchable amount.

When the word income is used, it should cover all income not just earned income

GGMK2 I think you would be a very helpful person in formulating govt policy - pity they never ask for input from 'ordinary people'.

May be we need to go back to GB's idea of "Government of All the Talents"

Instead of which we have a government of few talents

I have a strong feeling Jalima that some of us have got at cross purposes. If I have contributed to that I am sorry but we sometimes need to unravel the points of the argument I suppose.
No I don't think so because I was agreeing with you about payment through NI (I think it was you on this thread, losing track now).

My other post about paying lump sums upfront (presumably to insurance companies) were just musings about how that would work and the pitfalls of it.

I really can't see the difference between someone having a few hundred thousand, millions even in the bank in hard cash or income and someone who has gained that same amount via a massive increase in their house value.
gillybob that is what I said to DH when we were discussing it the other day.

On the other hand - if young people are unable to buy a property because house prices have increased so much then an inheritance (possibly split several ways) could be the only way some would ever be able to afford their own house.

I think I would rather pay NI weekly/monthly and if I never needed it then it would be in the general pot for those who might.

As I see it we have two choices for this sort of model. We either add NHS and Care into NI or we have a separate NH&CI
The second would seem to be the best way forward.

And a progressive amount would seem to be more sensible. £5 was just a figure I pondered on wondering if that amount from all would be sufficient.

Musings are good Jalima. Someone adds to them others comment on them and you get a good discussion

Jalima, I wonder, if the inheritance tax threshold is lowered, it might result in a drop in house prices, as young people would not be able to pay the deposis expected these days?

I'm not sure about that. Not every country has inheritance tax and you'd need to look at how it affects the housing market. I don't think it is something most people think about that much unless they are making their wills! or unless they live in the south-east where house prices have risen so much.

It's a very complex situation; lack of housing in general, lack of decent suitable housing (bungalows?) for older people to move to therefore they are not downsizing (that would have the added benefit of releasing cash for care), buy-to-let encouraged as an alternative to a pension fund, foreign investment.
Mortgages are relatively cheap compared to what they were 30 years ago so there are many other reasons why young people say they are not able to obtain a mortgage, although there are some who do seem to manage it.

A properly managed Govt scheme should be cheaper to run if it a non profit scheme than an insurance company one.
I was meaning that those of us who receive a pension high enough to pay tax should perhaps have the option of paying into an insurance for care element of NI or tax etc and if we wanted to not need to worry about paying fees every week have the OPTION of paying a lump sum into the scheme. This would be the equivalent of a bet really - I woul hope to pay my £30K and hope neither of us needed to go into care - or maybe for only a short time - and there would be no question of getting any of the lump sum back. That would remain in the pot or those who needed it. People on a low pension/income would remain as they are with all costs paid for them.
I would be glad to take the risk of paying in and not using it. Those who did not wish to pay up front even if they had assets would pay as they went along as they do now until they had whatever amount they were allowed to keep.
In the future as people had paid in the care element for years they would not need to contrubute a lump sum.

gillybob, I really can't see the difference between someone having a few hundred thousand, millions even in the bank in hard cash or income and someone who has gained that same amount via a massive increase in their house value.

I see a rather huge difference. One can't tap home value and it falls off at the smallest problem to the overall market. Home value is not like hard cash, until it is sold.

And hard cash is not like income. Difference to assets and income.

I think the care problem needs a solution, I just don't see solution here.

Many people are 'asset rich cash poor' though Welshwife - certainly our house is an asset as we now own it outright but paying £30,000 into such a scheme would not be possible for us or for many people I fear.

I would have thought that all countries, with a sophisticated market, would have a tax on the movement of capital although they may not call it an Inheritance Tax Jalima, but perhaps they don't. Do you know of any who currently don't do this? Or does anyone else know how other countries deal with this transfer of capital? It's all so fascinating

I'm not up for betting really Welshwife. Of the two schemes I suggested I like the separate NH&CI one personally.

I, like I think many others, have been thinking we pensioners would have to pay in a "pump-priming" amount to get it going because we had not paid in during our lives. When I think about it more though, we have been paying for both Care and the NHS through taxes so I am not sure why we are being expected to pay again with a capital amount. If they set up an insurance scheme they would have to admit just how badly the government/s have managed our taxes and we would all have to take a share in building it back up again.

Not sure about that but would be interested in everyone's thoughts as we HAVE been paying, haven't we?

There are no inheritance or estate taxes in Australia.
Under certain conditions retirees do not pay tax.
However, it is advisable to take out a top-up private medical insurance on top of the Medicare levy (2% of taxable income I think) as this cover is fairly basic.

^Britain's inheritance tax threshold of £325,000 is the second highest in the developed world, only behind Ireland, according to a global study by accountants UHY Hacker Young. The threshold for death duties in the United States is £3.2m, and the level has risen more than threefold in the last decade.
Several developed countries, including Australia, Israel and New Zealand have scrapped death duties altogether. The European average take on a large estate of £1.8 million ($3 million) is 14 per cent.^

Many emerging economies have not introduced them, with the average yield in the BRIC nations (Brazil, Russia, India and China) on a large estate is just 1 per cent. The British figures take into account the fact that the £325,000 threshold is doubled when the deceased has a spouse or civil partner. If not, the typical proportion of tax taken by HMRC on a large estate is 32.9 per cent.

I am not sure about transfer of capital before death. The amount in the UK is extremely limited unless a person lives for another 7 years in which case it is included in the total used for calculating inheritance tax.

There is a theory that the care sector is actually a valuable part of the economy and that it contributes to this far more than other sectors. If we assume this it then becomes something other than just a drain on resources and arguably should be state funded because of the benefits it brings.
These figures are interesting
It is also useful to make comparisons against other sectors in England to put these findings into context. For example, the adult social care sector employs more people (1.5 million) in England than:
■ the construction industry (1.1 million);
■ the transportation, storage and postal industry (1.1 million);
■ the public administration and defence sector (1.2 million); and
■ all restaurants, cafes, pubs and bars in the food and drink service industry (1.3 million)
The adult social care sector also contributes more GVA (£20 billion) per annum to the English economy than:
■ the production and distribution of electricity and gas (£16 billion)
■ legal activities (£17 billion)
■ the arts, entertainment and recreation industries (£18 billion)
■ the food and drink service industry (£19 billion).

It's a very tangled web isn't it. No wonder many say we have one of the most complicated and complex tax systems in the world.
[sigh]

Its important i think that if there is money available then the person needing care should be paid like a pension and can use it how he or she wants to. Then the people training carers ( in Germany they have been trained for 2 years) are keen to open care homes and day centres to provide help on a daily basis.

Dementia has only been recognised as a condition needing care this last year. So now those with a spouse who is slightly dement can get a little bit of help- help with washing and showering and shaving. There are also day centres.

I wonder what happens to someone who becomes violent or a danger to themselves Margaret. Would they be treated under mental-health rules?

I thought if you gave money away 7 years or more before you died it does not count as part of your estate for IHT - in fact, I'm sure of that fact.

Our social care sector is in crisis, with severe consequences for the quality of care, public finances, personal assets, pressures on unpaid carers of family and friends, and delays to discharging patients from hospitals.

Care services have been slowly but relentlessly privatised. In recent years, one in ten people reaching the age of 65 have faced lifetime care costs of over £100,000, with some homeowners paying the entire value of their homes.

The Conservatives’ cuts have led to £4.6 billion lost from social care budgets, despite rising demand. Around 1.2 million older people have care needs that are going unmet. Care in the community has become a cover for unseen neglect.

In our first term, Labour will lay the foundations of a National Care Service for England.

Our first urgent task will be to address the immediate funding crisis. We will increase the social care budgets by a further £8 billion over the lifetime of the next Parliament, including an additional £1 billion for the first year.This will be enough for providers to pay a real living wage without cutting the quality of care they provide. It will allow implementation of the principles of the Ethical Care Charter, already adopted in 28 council areas, ending 15-minute care visits and providing care workers with paid travel time, access to training and an option to choose regular hours.

Labour will also increase the Carer’s Allowance for unpaid full-time carers to align the benefitwith rates of the Jobseeker’s Allowance.

Short-term funding solutions will not address the fundamental long-term challenges of our ageing demographics, nor meet the growing demands arising from late-life illnesses.

National Care Service will be built alongside the NHS, with a shared requirement for single commissioning, partnership arrangements, pooled budgets and joint working arrangements. We will build capacity to move quickly towards a joined-up service that will signpost users to all the appropriate services at the gateway through which they arrive.

In its first years, our service will require an additional £3 billion of public funds every year, enough to place a maximum limit on lifetime 72 FOR THE MANY NOT THE FEW personal contributions to care costs, raise the asset threshold below which people are entitled to state support, and provide free end of life care. Thereare different ways the necessary monies can be raised. We will seek consensus on a cross-party basis about how it should be funded, with options including wealth taxes, an employer care contribution or a new social care levy.

Improving the quality of social care is a vital part of providing dignity in older age and independence and support for people who are vulnerable or have a disability or a mental health condition. Labour will build a new National Care Service. We will also set out the funding alternatives clearly and honestly, seeking to implement change through consensus. Providing dignity and care in old age should transcend party politics and campaign slogans.

This is the relevant part of the Labour Manifesto. Perhaps someone with access to the Conservative Manifesto could do the same with notes to show the changes Mrs May announced so we can see one against the other.

Has TM not backtracked a bit since the sudden drop in their standing in the opinion polls? I caught a drift that she is now planning a cap on what anyone should have to spend not just a max £100K of assets that can be left - did I dream it? It's been a very busy time here!

No she did say there would be a cap, but declined to name it. Said it would have to be decided by a working party

And she's not letting us know before the election.
Turkeys voting for Christmas.