Newspaper headlines suggest Cameron and Clegg have listened to arguments about accepting the Dilnot Commission proposals for funding social care. This is despite serious opposition from the Treasury to the £1.7 billion pa bill for this policy shift. There is little doubt that much of the population is gloriously oblivious to this financial millstone but equally no doubt that many people with caring responsibilities for elderly and infirm family members will feel a huge sense of relief if the rumours prove true.
It comes as a shock to many people as they or their loved ones approach old age and the problems of disability or Alzheimer’s that the social care they thought was provided free by the state has to be paid for by all but the very poor. People do not distinguish between health care (free at the point of delivery), provided by the National Health Service and social care (subject to means testing), commissioned by local councils in England but provided more and more by private and voluntary sector providers.
If you are getting old and frailty makes personal care such as washing, toileting, dressing and feeding increasingly challenging, you will be entitled to an assessment of your needs and abilities by your local council social services. This assessment will be in two parts: physical and financial.
If your needs are sufficient, you can be visited in your home several times per day by a qualified care worker who will usually be employed by a private or voluntary sector organisation under contract from the council. This visit can provide for all the personal care needs that have been assessed but will usually have to be done within a strict timescale measured in 15 minute blocks. The tendency is to keep people in their own homes for as long as possible and this usually accords with their wishes. However, for people with very high levels of need or who would be at risk, they may be placed in a residential care home. In either case, domiciliary or residential care, they will be expected to meet the full costs of care for as long as they can and unless they are very poor.
The financial assessment will test ability to pay. The threshold beyond which people have to pay the full cost of their care is £23,500 of capital, including the value of the home. Care in the home can cost £15 to £25 per hour or more. This means someone receiving 2 hours per day, seven days per week will have a monthly bill of £900 to £1,500 and their capital will soon be diminished. For residential care, costs can be between £350 and £1,000 per week or more.
Many people manage without having any contact with their local council. They are known as “self funders”. They identify their own needs, contact a care provider and contract with them, paying directly and with no involvement of their local council. However, there often comes a time when the funding runs out and they have to approach the council for help. This may involve some difficult decisions where their chosen care package is more expensive than the council feels able to fund.
The Dilnot Commission wants to raise the financial threshold where people have to pay for their care to £100,000 and also wants to cap the total payments an individual might make to £35,000 after which state funding would kick in. There are those who argue that this is simply protecting the wealthy middle classes and allowing them to pass on more of their wealth in their wills than is presently possible. This is undoubtedly true in part but there is another side to the coin.
Consider two old ladies who live in identical houses as neighbours:
- Mrs Scroggins is a widow and lives in the council house in which she was born, paying £23 per week in rent. Her husband was a car worker; he had no pension and little in the way of savings. They went on foreign holidays every year. They were heavy smokers – Mrs Scroggins still is – and they patronised the local bookies and boozer regularly. She has practically nothing in the way of savings and relies on benefits to supplement her state pension. Mrs Scroggins has never worried about her three children because they are all on benefits and she knows they will continue to be supported.
- Mrs Bobbins next door was married and she and her late husband were teachers. They bought their council house under Margaret Thatcher and have consistently improved and extended it. They joined a pension scheme and accumulated savings by prudent budgeting and a modest life style. Mr and Mrs Bobbins were always motivated by the desire to accumulate savings to enable them to leave something to each of their children.
Mrs Scroggins will have her care bills paid by the state for as long as she needs. Mrs Bobbins will have to pay for all of her care bills and will have to sell or mortgage her house until her capital is reduced to less than £23,500.
If the Dilnot Commission proposals are implemented, they will not affect Mrs Scroggins but Mrs Bobbins will only have to pay for her care if her capital exceeds £100,000 and only until she has spent £35,000. For example, if her home and savings are worth £150,000, she will still be left with £115,000 to pass on to her children.
This change may benefit many middle class people who have made provision for their later years and it may enable them to pass on a modest level of wealth to their children. I fail to see what is wrong with this.
If Cameron and Clegg can squeeze £1.7 billion pa out of the Treasury to fund this change in policy, they will secure the gratitude of a lot of people who are worried sick by the onset of disability and dementia in themselves or their parents.If this subject interests or worries you, here is a link to the AgeUK web site with some helpful information and fact sheets and to the Dilnot Commission web site.