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Social care cap: Inheritance tax thresholds frozen Social care cap: Inheritance tax thresholds frozen
(about 2 hours later)
A further freeze in inheritance tax thresholds is set to be announced to help pay for more help for the elderly.A further freeze in inheritance tax thresholds is set to be announced to help pay for more help for the elderly.
On Monday the government is expected to set out plans to cap the cost of social care in England at £75,000 from 2017.On Monday the government is expected to set out plans to cap the cost of social care in England at £75,000 from 2017.
It will also let people with assets of up to £123,000 qualify for some state help - the current limit is £23,250.It will also let people with assets of up to £123,000 qualify for some state help - the current limit is £23,250.
To help pay for this ministers will freeze inheritance tax thresholds at £325,000 for individuals and £650,000 for couples for three years from 2015.To help pay for this ministers will freeze inheritance tax thresholds at £325,000 for individuals and £650,000 for couples for three years from 2015.
There has also been some speculation that the Chancellor George Osborne will abolish the second state pension to help fund the scheme.
BBC political correspondent Iain Watson says the government has made a political calculation to help up to 100,000 people who struggle to meet the costs of social care, while thousands more households are affected by inheritance tax.BBC political correspondent Iain Watson says the government has made a political calculation to help up to 100,000 people who struggle to meet the costs of social care, while thousands more households are affected by inheritance tax.
It is estimated the policy could cost an extra £1bn a year by the end of the decade so it will also be funded by previously announced changes to National Insurance and pensions and further cuts in government departments, our correspondent added.
'Realism''Realism'
Currently people in England with savings and capital of more than £23,250 have to pay for unlimited care costs. Those with assets of between £14,250 and £23,250 have these taken into account when their contribution is assessed. Below £14,250, only a person's income is considered.Currently people in England with savings and capital of more than £23,250 have to pay for unlimited care costs. Those with assets of between £14,250 and £23,250 have these taken into account when their contribution is assessed. Below £14,250, only a person's income is considered.
The system means thousands of people are forced to sell their homes or use up their life savings to pay for help.The system means thousands of people are forced to sell their homes or use up their life savings to pay for help.
Reform of social care has been the objective of successive governments and in 2010 economist Andrew Dilnot was commissioned by the coalition government to examine options for overhauling the system.Reform of social care has been the objective of successive governments and in 2010 economist Andrew Dilnot was commissioned by the coalition government to examine options for overhauling the system.
The Dilnot Commission recommended setting a lifetime cap of £35,000 on the total people would have to pay towards care at local authority prices - excluding living costs - and raising the value of assets people could hold before having to pay the full cost of their care from £23,250 to £100,000.The Dilnot Commission recommended setting a lifetime cap of £35,000 on the total people would have to pay towards care at local authority prices - excluding living costs - and raising the value of assets people could hold before having to pay the full cost of their care from £23,250 to £100,000.
Mr Hunt is quoted in the Daily Telegraph as saying the £35,000 cap would "not be credible" in the current economic climate.Mr Hunt is quoted in the Daily Telegraph as saying the £35,000 cap would "not be credible" in the current economic climate.
"It's not helping anyone to announce a generous cap by increasing the national debt. We need to have some realism, the important thing is that we have a cap.""It's not helping anyone to announce a generous cap by increasing the national debt. We need to have some realism, the important thing is that we have a cap."
The health secretary added that he would expect pension and insurance companies to offer new products "where people save for their social care just as they save for their pension".The health secretary added that he would expect pension and insurance companies to offer new products "where people save for their social care just as they save for their pension".
He is expected to set out the full details of the government's plan in a statement to the Commons on Monday.He is expected to set out the full details of the government's plan in a statement to the Commons on Monday.
But Labour say one of the reasons costs are rising is because the government is already cutting local authority care budgets too severely. It has said the cap should no more than £50,000.But Labour say one of the reasons costs are rising is because the government is already cutting local authority care budgets too severely. It has said the cap should no more than £50,000.
'Firing line''Firing line'
David Rogers, chairman of the Local Government Association's community wellbeing board, said: "A cap will help create more certainty, fairness and, in the process, peace of mind.David Rogers, chairman of the Local Government Association's community wellbeing board, said: "A cap will help create more certainty, fairness and, in the process, peace of mind.
"We need a system that helps families with the cost of care in old age and protects them from the heartache of losing their homes to pay for it. We also need a system that encourages people to plan ahead, both financially and through healthy living to help prevent the need for care."We need a system that helps families with the cost of care in old age and protects them from the heartache of losing their homes to pay for it. We also need a system that encourages people to plan ahead, both financially and through healthy living to help prevent the need for care.
"We are concerned that the cap alone... won't address these issues.""We are concerned that the cap alone... won't address these issues."
The Alzheimer's Society said that a large rise in the capital threshold could take thousands of people "out of the firing line" for huge costs.The Alzheimer's Society said that a large rise in the capital threshold could take thousands of people "out of the firing line" for huge costs.
But it added: "A £75,000 cap is so high that it would only help 'the few'."But it added: "A £75,000 cap is so high that it would only help 'the few'."
In Scotland personal care is free for those over the age of 65 who have been assessed by the local authority as needing it.In Scotland personal care is free for those over the age of 65 who have been assessed by the local authority as needing it.
People who live at home are not charged for personal care services, while those paying their own way in care homes get more than £200 a week to cover personal and nursing care.People who live at home are not charged for personal care services, while those paying their own way in care homes get more than £200 a week to cover personal and nursing care.
While Holyrood says it is fully committed to the funding of free personal care, figures published last year showed the cost of providing it had risen by more than 150% since 2005.While Holyrood says it is fully committed to the funding of free personal care, figures published last year showed the cost of providing it had risen by more than 150% since 2005.
In Wales, a weekly maximum of £50 is charged to all those using non-residential social services;.In Wales, a weekly maximum of £50 is charged to all those using non-residential social services;.
The Welsh government has pledged to build a new system of paying for social care that was "fair, affordable and sustainable in the long term".The Welsh government has pledged to build a new system of paying for social care that was "fair, affordable and sustainable in the long term".