The 4th of July 2011 could go down as England’s Dependents Day as big steps were today made towards reforming the care funding system – which could give both older people and their offspring more control of their assets in later life. While welcoming the report of the Commission for Care Funding and Support, Dr Ros Altmann, Director-General of over-50s organisation Saga, said, however, that more work needs to be done.
“Many older people are at risk of becoming dependents of both their family and the social care system, and they are very concerned that the assets for which they have worked long and hard will be used up when paying for their care in later life rather than inherited by their dependents,” said Dr Altmann.
“This report’s recommendations are designed to ensure more money can be passed on to loved ones rather than being used for care. On the face of it, this is, of course, very good news - and the current system certainly needs reform. But we have concerns.
“Dilnot's recommendation essentially amounts to setting up a social insurance system available nationally with a £35k 'excess'. At the moment we have no system for pooling the risk for providing care. We can pool the risk of needing health care, and we can pool the risk of needing to rebuild our home or replace our car - but not for needing to spend thousands on care. This lack of options to prepare for care urgently needs addressing.
His ideas should pave the way for the private sector to offer insurance to people that will cover their care needs in later life. We do not know if we will need this care in advance, we would like to be able to plan for it, but at the moment we can't. By capping the amount that people have to pay, the market for insurance or savings plans to cover care costs can open up.
However, while welcoming the report, we do have some concerns.
“The Commission says State support for people who need care should only start at the level of ‘substantial need’, so people with moderate needs do not even start on their £35,000 cap. This runs the risk of more people ending up needing expensive care later on and we fear that local authorities currently offering to cover moderate care needs may decide not to do so in future. This would cause more hardship for older people and their families and we need to find ways to ensure that more funding comes forward for early intervention and prevention, either by helping people in their own homes before they have substantial needs, or by installing new technologies that can make it practical to stay at home - which is where people want to be.
“State support will have to increase, by £1-2billion a year, but it will still focus on those with highest needs now - with not much for those who could be helped to avoid these needs.
“We believe that early intervention – helping those with moderate needs – is crucial to avoiding greater cost to both Health Service and social care budget holders. The most effective approach is to increase support for home care – and our research clearly indicates that more than 80% of people would like to be cared for in their own home in later life.
“We must avoid arguments over funding and not single out older people to carry the burden of this extra care spending. Andrew Dilnot outlines three possible ways to pay for his reforms: either by a general tax rise - which is how the current system is funded - or raising taxes specifically on older people to cover the costs because most extra spending will be on older people - which we believe would be grossly unfair and politically unpopular - or by reassigning existing spending, which is very much our preferred option. By diverting resources from the NHS to care, we could be saving huge sums in future by preventing people needing to be hospitalised or having falls due to being left without help they need.
“But the most important thing, by far, is that we must address this urgently. Andrew Dilnot recommends setting up three working groups – one for a national system of standardised assessments, one for development of new financial products to provide for future care needs, and one for a new information and advice service. All three of these issues can be tackled straight away, they do not need to wait for any decisions on the level of the cap or the level of a means test, or the source of any extra funding.
“Therefore, these groups must be established without delay. And they should be given a strict timetable for reporting. Legislation is promised but must be delivered. Politicians in the past have failed to deliver, but there must be no excuses. Consultations and Working Groups must not be a way to park the issues – we have to get on with reform.”
For further information please contact the Saga Press Office on 01303 771529.