Look At Taxation To Avoid Care Crunch

May 14, 2012 | By | Reply More

Care for our ageing population should be funded through taxation in a way that is inter-generationally fair with wealthier older people paying more, according to United for All Ages. A new paper, The Care Crunch, published today (14 May 2012) by the social enterprise proposes two ways this could be done.


With the government seemingly at an impasse on taking forward the Dilnot commission’s recommendations to reform care funding, United for All Ages says imminent publication of the care white paper must be decision time – urgent action is needed to prevent the care system collapsing.


United for All Ages argues that too many questions remain unanswered about the Dilnot proposals. As a result no ‘simple, fair and sustainable’ solution is on the table. United for All Ages therefore calls on government to look again at how a tax-funded care system could deliver better care.


The Care Crunch argues that tax funding would not only be fairer than a cap on care costs but it would also enable joint working between health and care and preventative work to keep older people out of hospital and better supported at home. Care costs should be tax-funded but not the hotel (accommodation, food etc) costs of residential care, thereby creating a level playing field for care homes and home care.


Rather than looking to income tax which is paid by the younger working population, the paper says that sufficient funds to cover increasing care costs could be found from wealthier older people by:

-          Means testing universal benefits for older people like winter fuel payments and bus passes that wealthier older people don’t need and redirecting the savings to pay for better care,


-          Introducing a care duty on estates above a certain value eg 5% on estates worth more than £25,000, and use the extra funding generated from larger estates to pay for better care (like the 1p on national insurance to pay for the NHS). A collection system is already in place and payment would be linked to wealth.

The Care Crunch paper argues that the Dilnot proposals would make the current confusing care system even more complex, would be regressive, would add substantial transaction costs, wouldn’t meet current unmet needs and future growth in demand for care, and would not support joined up care and health and promote prevention. A tax-funded care system using older people’s wealth would tackle these problems and could link payment from estates at death to what is in the main end of life care as well as keep pace with our ageing population.


Stephen Burke, director of United for All Ages and the Good Care Guide, said: “Everyone agrees that care for older people is in crisis but we seem no closer to resolving the fundamental questions about how we pay for a new system. Dilnot has not provided the magic solution. Better care will cost us all more. The issue is how to do so in a way that is fairer, simple and sustainable.


“We urge the government to look again at taxation as the basis for a fairer care system whereby older people’s contributions reflect their wealth and the risks and costs of care are collectively shared. Care is a public good – like health and education – and none of us know whether we will get dementia for example. So sharing the costs of care through taxation of older people’s wealth must be the best way forward. Will the government rise to the challenge in its white paper?”


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Category: Alzheimer's Care, Care Home Funding, Care Home News, Care Industry News, Care News, Dementia Care, Elderly care, Older People, Social Care

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