Queen’s Speech 2017 – The Future of Social Care
Cate Searle, Director and Head of Community Care Law at Martin Searle Solicitors, examines the key proposals addressing social care issues in the Queen’s Speech ahead of the extended two-year parliamentary session.
Original news: Government publishes Queen’s Speech 2017, LNB News 21/06/2017
Tory Government U-Turn
In the Conservative manifestos for both the 2015 and 2017 Elections, pledges were made about a lifetime cap on care fees. In 2015, we were told it would be capped at £72,000. In 2017 the pledge was that everyone would be able to retain £100,000 after paying for care. Both promises were reversed on 22 May 2017 by Theresa May‘s infamous U-turn when she accepted, in the face of widespread criticism, that her social care funding policy and the headline figures required more work.
The Queen’s Speech set out a commitment by the Government to widely consult. This is a marked difference from the manifesto’s social care funding proposals which were formulated without consultation with Conservative back benchers or any other parties and which was universally unpopular.
Why is the future funding of social care such a controversial issue?
Many individuals who require care and support, and their families, feel that the current paying for care rules are extremely unfair. Many individuals find that everything they have worked for all their lives, including their home, is used to pay for long-term care in later life and that the government does not contribute enough, or in some cases, contribute anything at all.
There is widespread misunderstanding about how the costs of long-term care are paid for. Many people incorrectly assume that the state will pay all or at least a large share of the cost and then face a shock when they find out this is not the case. At the same time, some of those who are aware that ‘everything will be spent on care fees’ take complex care-fee avoidance measures (deprivation of assets), which only adds to the cost borne by the public purse.
Theresa May’s election manifesto proposed a ceiling on the amount that individuals would have to pay for their care, to ensure that each person was allowed to keep £100,000. She talked about no one having to sell their home in their lifetime. Crucially and controversially, she proposed to change the way that an individual’s home is treated as an asset in the paying for care equation when they receive care at home. Her proposals were dubbed ‘the dementia tax’ because they would most negatively affect people with long-term conditions such as dementia who might require many years of care and support.
The reality is that many of the care cap pledge figures quoted by Ministers over the last few years are misleading even though they make good headlines. The £100,000 proposed ceiling that has now been withdrawn was actually an improvement on the current funding regime which could leave an individual with as little as £23,250 after paying for care, or in the very worst case, only leaving them with £14,250.
When it was presented by the Conservatives, they heralded it with the promise, ‘No-one will have to sell their home in their lifetime to pay for care fees’. However the current rules already meant that no-one had to sell their home in their lifetime to pay for care fees, as loan funding from the local authority became mandatory as part of the Care Act 2014. In most cases the house would have to be sold after the individual with care needs passed away, with interest applied on a cumulative basis.
Who pays for care?
The major problem with the 2017 manifesto proposals, rarely picked up by commentators, was that the government intended to remove the current property disregard regime, which would have a huge impact on thousands of families. Currently, the home is ignored as capital in the paying for care equation if you live in it and receive care in it. It is also ignored as capital in the paying for care equation if it is occupied by your spouse/partner/civil partner/your child under 18/a relative who is disabled or over 60.
I believe that the paying for care regime would be fairer if there was a combined ‘pool’ approach where we all pay a modest lump sum into the kitty on retirement and then additional National Insurance contributions, including those over 65 who are still earning. This is preferable to the ‘dementia tax’ individual liability approach where we each carry the burden of paying the costs of our own care. This would lead to families being less inclined to adopt paying for care avoidance measures, which often backfire, such as transferring the property into someone else’s name. This often leaves the vulnerable individual with no resources to pay for their care and social services having to pick up the tab.
The Queen’s Speech announcing Theresa May’s plan to consult and instigate cross-party working on this complex and controversial issue is both welcome and necessary. However, I have a strong sense of déjà vu as Green and/or White Papers were introduced in 2005, 2006, 2009, 2010 and 2012. In 2011, the Dilnot Commission’s report made a number of recommendations on the funding of care and support and we had cross-party talks in 2012.
Whatever is decided, it is vital that the Government provide clarity on the intended funding system for social care and the balance between individual contributions and state contributions so that we can all plan ahead.
Interviewed by Ioan Marc Jones. This extract is taken from an article published in LexisNexis on 26 June 2017.