Care Home News

The two largest parties have spent the week courting voters with promises to relieve the financial burden of paying for care by middle income voters.  We take a quick run through their proposals.

The Tory plan allows for an £8k payment at age 65, as a one off insurance payment in exchange for the costs of care homes being met in future years.  The voter focussed aspect of this plan is to prevent the elderly from having to sell off their houses and spend all their savings on care home costs.  The selling of homes to pay for care has become a ‘touchstone’ issue for certain sections of the media and electorate, as it appears to penalise people who have worked hard to save and pass something on to their children. The scheme appears sound in principle, but it will not entirely solve the problem.  Firstly, the appeal of the scheme may be to quite a ‘narrow’ band of people.  Most people will not be able to afford it. Of those who can afford the premium when they retire, some have enough money to pay for care without selling their homes.  For people who have enough money to pay the insurance premium, but not enough to pay for care, the scheme appears very desirable.  The other unanswered question is the financial model; £8k at age 65 does not appear to be enough to fund such a scheme – even assuming that less than half will actually require a care home.  The scheme will therefore require subsidy at public expense.

The Labour plan focuses on Home Care, but is similarly concerned with voters who have enough savings not to qualify for full state assistance, but for whom the costs of care are a real burden and prevent them from passing wealth to the next generation.  Historically, this has not been a touchstone issue for Labour. Many Labour people are  resistant to the notion that the tax-payer should subsidise care  for people who can afford to pay for themselves, simply so that they can pass on more to their children.  The strength of feeling amongst middle income voters has weakened this ideological resolve

Their solutions is to provide free personal care. This is aimed at people with the highest levels of care needs, and is to be paid irrespective of financial means.  This approach would help keep some people in their own homes and might apply to 350,000 people.  Aside from the cost, the main problem with this model is the risk of perverse incentives.  The Kings fund is concerned that local authorities would find it cheaper to push people into residential care homes (where individuals would become responsible for the full costs of personal care) rather than this home care solution that is expensive to the local authority.

Read the full story about the Tory care home scheme at the BBC, and the Labour free personal care scheme, also at the BBC.