Conservative proposals on Elderly Care "represent the biggest stealth tax in history"
"These proposals will mean that the majority of property owning citizens could be transferring the bulk of their assets to the government upon death for care they have already paid a lifetime of taxes to receive. It is likely to represent the biggest stealth tax in history"
- c.75% of over 65s in the UK are home owners
- The average value of a property in the UK is £280,000
- Conservatives committed in 2015 to cap state elderly care at £72,000 in total
- The Dilnot Commission into elderly recommended a cap of £35,000 in total
- The average cost for residential care is £29,270 per annum
- The average cost for nursing care is £39,300 per annum
- The new proposals mean there will be an unlimited maximum charge for elderly care
- The new proposals open up each citizens primary property to seizure upon death to cover care costs, even if care was received at the primary property
- With increased life expectancy it is anticipated that at least 70% of people will require some form of elderly care (Source: Age UK)
"In 2010 the UK was promised a bonfire of quangos. In 2016 we voted for a bonfire of directives from Europe, but we will see a bonfire of home ownership before either unless the government rapidly reverses it's proposed formula for funding long term care.
Our paper, Dilnot Recapped, backs scrapping a cap on care costs (which never included hotel fees) in return for a cap on all care costs after 5 years and the retention of the principal of keeping the rate of asset depletion tapered.
The current policy throws everything done over the last 7 years in the bin in return for a cosmetic increase in the asset base to 100k.
What this amounts to is an inheritance tax of 100% on a £100K threshold if you happen to need complex care. At current rates care costs could reduce an asset base of £300k to £100k in 4 years or less.
This policy removes the incentive to accumulate wealth for the family, provides no peace of mind and does nothing to ban councils being cross subsidised by self funders who pay higher fees."
Bow Group Chairman Ben Harris-Quinney said:
"These proposals will mean that the majority of property owning citizens could be transferring the bulk of their assets to the government upon death for care they have already paid a lifetime of taxes to receive.
It is a tax on death and on inheritance. It will mean that in the end, the government will have taken the lions share of a lifetime earnings in taxes. If enacted, it is likely to represent the biggest stealth tax in history and when people understand that they will be leaving most of their estate to the government, rather than their families, the Conservative Party will experience a dramatic loss of support."
The Bow Group calls for the following:
1. A cap on all elderly care fees after 5 years
2. Retention of tapered asset depletion
3. A single tariff per care home for councils and self funders
4. Nursing care to be free as part of the NHS
5. All assessment of care needs following hospital discharge to be done once successfully placed and not during inpatient stay.