Elderly could pay £12,000 for care

Monday, June 15, 2009

A green paper to be published at the end of June is expected to suggest charging the elderly £12,000 each to help fund their care. The money would either have to be paid when they retire or taken out of their estate when they die.

The idea is said to be to get away from people with savings of more than £22,250 having to sell their homes to fund their care.

Another possibility is a 'care duty' that would put 2.5 per cent on top of inheritance tax from estates worth over £25,000. Whether the best scheme or not, this approach could be the preferred option because Labour increasing inheritance tax could be a vote winner come the general election.

Stephen Burke, chief executive of the charity Counsel and Care, said: 'Families want the right care and the right deal. It would be much fairer if better care was funded through a care duty on people's estates, with a small percentage paying for care. Rather than losing the family home, people would pay a bit more through inheritance tax. The care duty could top up current public spending or be ringfenced and used as part of a new social insurance scheme to pay for care."