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Social care: Jeremy Hunt hails 'fully-funded solution' Social care: Jeremy Hunt hails 'fully-funded solution'
(about 2 hours later)
The government is due to announce its "fully-funded solution" to the problem of elderly people in England who cannot afford social care. The government is due to announce its "fully-funded" plan to cap at £75,000 the amount elderly people in England have to pay for social care.
It is expected to include a £75,000 cap on the costs people pay for care and a rise in the threshold for means-tested support from £23,250 to £123,000. There will also be a rise from £23,250 to £123,000 in the amount of assets people have before having to contribute to the costs of basic nursing care.
Health secretary Jeremy Hunt said the "scandal" of many people selling homes to pay care bills must be tackled.Health secretary Jeremy Hunt said the "scandal" of many people selling homes to pay care bills must be tackled.
Labour said the country needed "a far bigger and bolder response".Labour said the country needed "a far bigger and bolder response".
At present, up to 40,000 people every year are forced into selling their homes because they face unlimited care bills, says Mr Hunt - who will set out the plan in a statement to the Commons.At present, up to 40,000 people every year are forced into selling their homes because they face unlimited care bills, says Mr Hunt - who will set out the plan in a statement to the Commons.
He told the BBC's Andrew Marr Show on Sunday the aim was "to be one of the first countries in the world which creates a system where people don't have to sell their own house".He told the BBC's Andrew Marr Show on Sunday the aim was "to be one of the first countries in the world which creates a system where people don't have to sell their own house".
Deputy Prime Minister Nick Clegg, writing in the Sunday Telegraph, meanwhile, said: "We will make sure no-one is forced to sell their home to pay for care in their lifetime, and no-one sees their life savings disappear just because they developed the wrong kind of illness."Deputy Prime Minister Nick Clegg, writing in the Sunday Telegraph, meanwhile, said: "We will make sure no-one is forced to sell their home to pay for care in their lifetime, and no-one sees their life savings disappear just because they developed the wrong kind of illness."
The cost of accommodation in residential care homes averages about £7,000-£10,000 a year. While costs vary hugely, it is estimated that half of all people turning 65 in future will have to pay up to £20,000 towards their basic nursing care - such as help to get washed and dressed - while, for one in ten, the figure will be above £100,000.
Ministers may be giving themselves a big pat on the back for their changes to the social care system.Ministers may be giving themselves a big pat on the back for their changes to the social care system.
But for many involved in the sector this is just the start of the process.But for many involved in the sector this is just the start of the process.
Firstly, the £75,000 cap is more than double the figure recommended by Andrew Dilnot, the independent expert asked to look at the issue by government two years ago.Firstly, the £75,000 cap is more than double the figure recommended by Andrew Dilnot, the independent expert asked to look at the issue by government two years ago.
While publicly it is being welcomed - campaigners have been promised reform ever since Tony Blair came to power - there is a nagging fear that it is too high to really get people engaged with planning for their old age.While publicly it is being welcomed - campaigners have been promised reform ever since Tony Blair came to power - there is a nagging fear that it is too high to really get people engaged with planning for their old age.
And, secondly, this reform does nothing to improve the quality of services currently on offer. It is purely aimed at preventing people having to sell their own homes to pay for care.And, secondly, this reform does nothing to improve the quality of services currently on offer. It is purely aimed at preventing people having to sell their own homes to pay for care.
Local government has long argued the system is dramatically under-funded and services are suffering as a result.Local government has long argued the system is dramatically under-funded and services are suffering as a result.
Of all that some say needs to be done, the introduction of a cap may well turn out to be just the tip of the iceberg.Of all that some say needs to be done, the introduction of a cap may well turn out to be just the tip of the iceberg.
While the cap is a sizeable sum the hope is that, by establishing the principle that the state will cover the really high costs, people will start planning for their future care needs. The government is proposing to cap the amount that anyone will have to pay in their lifetime at £75,000.
href="/news/business-21164964" title="How can you pay for long-term care?" >There are a variety of ways in which the elderly with the means to do so can free up £75,000, but one hope is that the insurance industry will start engaging with the issue and developing products that would cover old-age care. However, this figure would only cover the cost of nursing care and people would still have to pay for accommodation and food - which averages about £7,000-£10,000 a year, and which will reportedly be capped at £12,500 a year under Mr Hunt's plan.
Mr Hunt, who said 10% of people ended up paying more than £100,000 in care costs, said that "just as people make provisions for their pensions in their 20s and 30s, so we also need to be a country that prepares for social care as well". If the changes are approved, people are only expected to start receiving support above the £75,000 cap by 2019 at the earliest.
But the hope is that, by establishing the principle that the state will cover the really high costs, people will start planning for their future care needs.
There are a variety of ways in which the elderly with the means to do so can free up £75,000, but one hope is that the insurance industry will develop products that cover old-age care.
Mr Hunt said "just as people make provisions for their pensions in their 20s and 30s, so we also need to be a country that prepares for social care as well".
He added: "By setting an upper limit to how much people have to pay, then it makes it possible for insurance companies to offer policies, for people to have options on their pensions, so that anything you have to pay under the cap is covered."He added: "By setting an upper limit to how much people have to pay, then it makes it possible for insurance companies to offer policies, for people to have options on their pensions, so that anything you have to pay under the cap is covered."
As well as introducing a cap, the government is expected to increase the means-tested threshold - there to ensure the less well-off get state help towards their care costs. Currently anyone with assets of more than £23,250 has to pay for their care. Under the plans, it is likely the threshold will rise to £123,000 for people who need to go into a care home. The government is also expected to increase the means-tested threshold - there to ensure the less well-off get state help towards their care costs.
That reflects the fact that rising property prices over the years have effectively meant any home-owner falls outside the state system. Currently anyone with assets of more than £23,250 has to pay for their care. Under the plans, it is likely the threshold will rise to £123,000 for people who need to go into a care home. That reflects the fact that rising property prices over the years have effectively meant any home-owner falls outside the state system.
Mr Hunt is also expected to reveal that the plans will be part-funded by freezing the inheritance tax threshold - at £325,000 for individuals and £650,000 for couples - for three years from 2015.Mr Hunt is also expected to reveal that the plans will be part-funded by freezing the inheritance tax threshold - at £325,000 for individuals and £650,000 for couples - for three years from 2015.
That is despite Chancellor George Osborne's Autumn Statement pledge, in December, to raise the threshold by 1% - to £329,000 for individuals and £658,000 for couples - in 2015/2016. Other funding will come from previously-announced changes to National Insurance and pensions.That is despite Chancellor George Osborne's Autumn Statement pledge, in December, to raise the threshold by 1% - to £329,000 for individuals and £658,000 for couples - in 2015/2016. Other funding will come from previously-announced changes to National Insurance and pensions.
Labour said that, while the government's plan would help "some people who need residential care in five or more years' time", it would not be fair "for people with modest homes". Labour said the announcement was a "small step forward" but the changes would not take affect for many years and immediate action was needed.
"And these proposals won't do anything for the hundreds of thousands of elderly and disabled people who are facing a desperate daily struggle to get the care and support they need right now," shadow minister for care and older people Liz Kendall said. "These proposals won't do anything for the hundreds of thousands of elderly and disabled people who are facing a desperate daily struggle to get the care and support they need right now," shadow minister for care and older people Liz Kendall said.
"We need a far bigger and bolder response to meet the needs of our ageing population: a genuinely integrated NHS and social care system which helps older people stay healthy and living independently in their own homes for as long as possible.""We need a far bigger and bolder response to meet the needs of our ageing population: a genuinely integrated NHS and social care system which helps older people stay healthy and living independently in their own homes for as long as possible."
'Catastrophic risk''Catastrophic risk'
Economist Andrew Dilnot, whose review into the future of social care recommended a cap of between £25,000 and £50,000, said the proposals were "not perfect" but the current system was a "complete disaster" and he hoped the new framework would "radically reduce" people's anxieties about how they would cope in their old age. Economist Andrew Dilnot, whose review into the future of social care recommended a basic care cap of between £25,000 and £50,000, said the proposals were "not perfect" but the current system was a "complete disaster" and he hoped the new framework would "radically reduce" people's anxieties about how they would cope in their old age.
"It (the cap) is higher than I would have wanted," he told BBC Radio 4's Today programme. "I regret that. But I recognise that the public finances are in a particularly tricky state.""It (the cap) is higher than I would have wanted," he told BBC Radio 4's Today programme. "I regret that. But I recognise that the public finances are in a particularly tricky state."
It was simply not "plausible" for social care to be funded out of general taxation, he added, and the proposed mixed system would ensure the state picked up the "catastrophic risk" and made sure "nobody is uninsured if they turn out to be very unfortunate".It was simply not "plausible" for social care to be funded out of general taxation, he added, and the proposed mixed system would ensure the state picked up the "catastrophic risk" and made sure "nobody is uninsured if they turn out to be very unfortunate".
The National Pensioners Convention said the proposals "simply tinker at the edges" and that a £75,000 cap "will help just 10% of those needing care, whilst the majority will be left to struggle on with a third-rate service".The National Pensioners Convention said the proposals "simply tinker at the edges" and that a £75,000 cap "will help just 10% of those needing care, whilst the majority will be left to struggle on with a third-rate service".
"The current system is dogged by means-testing, a postcode lottery of charges, a rationing of services and poor standards and nothing in the plan looks like it will address any of these concerns," its general secretary Dot Gibson said."The current system is dogged by means-testing, a postcode lottery of charges, a rationing of services and poor standards and nothing in the plan looks like it will address any of these concerns," its general secretary Dot Gibson said.
Ian Owen, chairman of social care needs specialist Partnership Insurance, welcomed the plan but warned of "an absolutely chronic lack of awareness" of how much people have to pay for care, how long they're going to need it for and what their options are. Ian Owen, chairman of social care needs specialist Partnership Insurance, welcomed the plan but warned of "an absolutely chronic lack of awareness" of how much people have to pay for care, how long they are going to need it for and what their options are.
Will you or a member of your family be affected by the changes to social care funding? Send us your comments and experiences using the form below.Will you or a member of your family be affected by the changes to social care funding? Send us your comments and experiences using the form below.