AIBU to think a 10% inheritance levy for social care is fairer?

I don't think it's about what's fair as such, it's about what will actually cover the cost of care.

@mosaicwasthebest you make a really valid point about choices we make for our families. Some people who are not mega rich put all their efforts into private education for their children, some want a choice of housing, others prefer to fund big holidays and expensive cars.

I know there are those who can’t afford any of those choices, and at the other end of the scale there are the vastly wealthy. But many who started with nothing, and lived on fairly modest incomes, had hoped to pass on something to their families. If our house could eventually provide deposits for our DGC, that would give me great pleasure. Our estate will be well under the IHT threshold, but I’d be happy to contribute 10% of it if the majority of the care sector was publicly funded again. At 80, we’ve been fortunate in not needing care so far. Hopefully never.

I think if your quibble is with people having any money at all left over at the end of their lives, then being honest about that and consistent is a fairer way of arguing.

I don't know what level of IHT would be best, but then I also don't think absolutely everything should be free. For instance I'd personally be happy to pay to see a GP (means tested) if it meant everyone got a better service, although I'd prefer it if that fee didn't go to private profits but into the shared system. I also would expect to pay for a certain amount of care, and everything else, on a sliding scale.

I think the idea that inheritance is inherently unearned and undeserved money doesn't take enough account of the importance or value to society of family groups (biological or other) though. Most people (regardless of wealth) have a strong drive to make sure their families will be OK after their death, and saving in order to leave them some money is a natural thing to want to do. It's no more exploitative of the rest of society than someone spending money on their children while they're still alive - that is to say, both can lead to unequal outcomes to some extent, but both are also humans being fundamentally human with respect to their families.

Families as social units are more than just the individuals within then. Some inheritances entrench inequality, some will end up reducing it. To be really fair you'd need to count and means test the recipients and look at their lifetime earning potential before deciding whether them receiving an inheritance is good for society or not. IHT is crude but by being a percentage fairer than some.

A more punitive system that tried to wipe the slate clean each generation by removing most leftover cash would just make people bring forward that spending on family more and more, to an earlier point. Ironically this would entrench some inequality from an earlier point and also make more people entitled to free care, unless you bring in something that forces family to fund it (I think that happens in some countries).

Basically I think we have to strike a balance, and that means not viewing leaving things to family as inherently immoral and undesirable.

'Everyone' pays more so 'some' can still get money they didn't earn.

Why should people still have money at the end of their lives? Why?? You don't need it when you go so paying out all of it isn't a problem. Except for those left behind who want to have it for themselves.

There's a lot of complaining that those who pay privately are subsidising others - but when it's the other way round, with everyone paying into the pot so you can keep your inheritance, suddenly it's a good idea.

You make a good point that some terrible, debilitating illnesses you get for 'free' and others you don't. I would certainly support taxing all inheritance at a much higher rate to support social care across the board. What sort of level do you think it would have to be set at so that absolutely everyone can receive free care, for all things?

'Death taxes' forced the very wealthy - particularly the aristocracy - to yield up a meaningful percentage of their wealth to the country that enabled them to acquire that wealth instead of passing increasingly huge fortunes down through private and privileged family lines so their descendents could be rich in money and land without having to contribute anything to the country. I'm all in favour of IHT.

If Andy Burnham introduces a Social Care Tax at 10% it should be levied on all estates, but the portion of estates currently subject to 40% tax should still pay IHT at a meaningful % (say, between 20 and 30%) and the whole estate additionally pays SCT at 10%. The SCT could not be avoided by creating trusts etc. The IHT avoidance criteria are generous anyway and Burnham should look at tightening those at the same time. In parallel, he could look at raising the IHT threshold or introducing a new sliding scale.

Half of the government adult social care budget is spent on people of working age, but people seem to be assuming that a SCT would just be for funding elder care so Burnham would need to clarify that. Also whether a SCT then means everyone gets free care either in your home or in a care home - the 'accommodation' part of care home fees is a big chunk, think of paying for an indefinite hotel room full board, so if you had to pay that, a majority would need to sell their house anyway.

You don't seem bothered by people not paying full individual costs for other things (like medical care) and then getting to exercise this 'entitlement'.

It would arguably make more sense to have 100% IHT across the board than to keep making a special case out of expensive care. It's not discretionary spending, but nor is it a cost everyone has like rent or food. It's something some people need a lot of only because of the particular infirmity or illness they get when old, and other people don't need at all. It's a good example of something where sharing the risk makes sense, like with medical costs.

It's not even the 'entitlement to pass on an inheritance' that's relevant anyway, really, although being able to pass one on would be a side effect for some people of a better system. It's more fundamental than that, it would be a social contract that says by joining in a system where everyone pays a bit (according to what resources they have) no one ever has to pay out all (or nearly all) their money for nursing care. Whether they then leave it to other people or spend it on holidays or donate it to charity would be up to them. The point wouldn't be doing one particular thing with it but simply still having it, not having it all wiped out just by being unlucky enough to get something like Parkinson's, while other people don't pay a penny for eg cancer treatment and get to keep all their savings.

I'm not really talking about anything but the 7-year rule, which you brought up. You seem to be having an argument you've invented.

You're also making a lot of assumptions. Few people can manage to give everything away before they die, especially property - so complete freedom from benefit is difficult. It's designed to be difficult so people don't game the system for their own gain. If you reach 75 and are in good health and decide to give away the majority or your assets, where will you live? Renting would require retaining some value to cover that, perhaps for 10/20 years. Or are you suggesting people don't have to pay rent either because of their entitlement to pass down their leftover money as inheritance?

I agree, incredibly difficult for the council to prove deprivation of capital unless it is caught by the duck test. If someone does it after they've been to the GP for a dementia/alzheimers consultation, then there's clear intent they've transferred assets with an eye on long term care needs, likewise if someone does it when they're very old and/or infirm (and thus more likely to need care than someone a decade or two younger). But if someone does it who is healthy, expects to have a decade more of "healthy" lifestyle/activities etc., then a council won't have a hope in hell's chance of succeeding in arguing deliberate deprivation of capital. It ALL depends on the facts/circumstances of each case. The ones that the council win are almost always caught by the duck test because the facts show the motivation was obvious. Muddy the waters a bit and the council will struggle.

Again you are conflating two things.

The 7 year rule is relevant to IHT. It will not be disregarded even if you gave away your money specifically to avoid IHT or care costs assuming that you cover all the basics such as not retaining any benefit. You still will not be liable for IHT.

Deprivation of capital is relevant to care costs but it's complicated. The council has to prove that there was foreseeability and intention. If you reach 75, are in good health and choose to give away the majority of your assets then it might not be possible to prove deprivation of capital.

The 7-year rule is widely misunderstood, especially in relation to property - AND can be disregarded if there is suspicion that you gave away a large sum to avoid paying long-term care costs.

Even if you liquidated everything and somehow managed to parcel it out under the radar (in which case where would you live and what would you live on?) you'd be extremely unlikely to be able to predict exactly 7 years until you'd need care/die.

I think some people believe that the costs for poor or even averagely wealthy people should be socialised with of course the wealthiest paying the most but they also think the rich should fund their own care separately. Literally double bubble and insanely unfair.

You can. You just need to live more than 7 years afterwards. Why on earth can't a 30 year old gift large sums anyway for example? What moral obligation do they have to not do that?

But why not also if you need medical treatment at the end of your life and you have funds to cover it? Or the use of a fire engine, if you have funds?

Why must social care costs specifically stay individual and not shared?

In a shared costs system, you could potentially end up with the richest older people collectively paying more (and in return getting peace of mind), even if some individual ones pay less than they would do now. Would that be such a bad outcome?

In the unlikely event that people could effectively time that then they'll be taxed appropriately. You can't just give large sums of money away.

So in your world what happens if all the parents (and everyone else) gives away all their money just before they need care? Then nobody has the funds to cover the costs and everyone is reliant on the state.

Your idea that you can't give anything to your children in life in case you need it when you're old

That wasn't my idea, you've made an error there. My 'idea' is that if you require care at the end of your life and you have funds to cover it, you should cover it. That's it.

If people want to spend all their money in life that's fine, if they want to send their kids to private school, great - carry on! Why shouldn't people spend money as they please? If you want to pass money down to your children then that's fine - but if you need it to pay for care then you need to pay for that care, not keep your money. That's bad luck, yes - but that's how it is.

So what you are revealing are two aspects of delivery of the new system the Gvt will need to change to ensure it can recover the charge from eligible people.

If your friend is unable to get a mortgage, then the market has failed. And one policy solution is for Gvt to step in and create an gvt mortgage scheme to allow your friend to access a mortgage if they are refused elsewhere. Similar to student loans, so there is something of a precedence.

Ditto for equity release- she wouldn’t need to pay the mortgage over ten years, but a Gvt created scheme would enable people like your friend to pay what she owes and live in her house.

If she doesn’t like those options, then your friend is free to realise the necessary charge by selling her dad’s house she inherited and downsizing.

Your friend’s situation has been really interesting Xeno, hope it helps policy makers to think about all the possible scenarios and design the scheme so it recovers the money it needs to!

I think there's a bit of a subconscious feeling that social care is not really as essential as medical, and should all be provided by the person or by family. Buying it in at all is seen as a kind of going private, so a luxury, not a need.

Also it's perhaps seen as worth giving people medical care because some of the people who get that might recover and be valuable, but social care has no such obvious reward for society.

Within that assumption about family is another, of course, that there's an army of middle-aged people, mainly women, out there, who should somehow be the ones dealing with all of this.

Well, dealing with it until they get too tired and old, at which point their reward will be for society to hope they die quickly without being too expensive, just when they'll probably really feel like they've earned a rest and deserve a bit of being looked after.

There are other ways we could recoup money from older people on the basis that otherwise all they'll do is selfishly pass it down to their children. We could start charging for GP appointments after a certain age, so they all get totted up and when the person dies a sum for that is taken out of their estate. We could increase council tax for them on the same basis, and get the money later.

If the important thing as some people see it is to make sure that all of us pay for as much as possible of what we use after a certain age, while we have any funds remaining, because otherwise we might leave money to adult children, then we might as well do that.

Or we could say that leaving money to children is as OK if you need social care as if you need medical care, and that pooling costs would be better.

It would mean sucking up the fact that a minority of rich old people who need a lot of care will then get to leave more money to their children than they would have done with the current system.

It's only the same amount they'd be leaving if all they'd needed was expensive medical care and not social care, though. It might feel less unpalatable if we remember that other rich old people, ones lucky enough not to need a lot of care, will then be paying more than they did before, and leaving less money to their children.

There are two different things going on here. IHT and Care costs.

When it comes to care homes then most of us won't need them and even if we do, we are not likely to need them for long. There is however, the unlucky minority that need expensive care homes for a long period of time but does this mean that we all must retain all our assets and savings until the end of our life in case we are the unlucky few? That makes little sense to me as we don't all need to retain huge pots of money in case we crash our cars or our house burns down. We socialise the risk through insurance type schemes that make the whole system far more efficient and practical. This is obviously how social care should work. Your idea that you can't give anything to your children in life in case you need it when you're old and then obviously IHT comes and takes 40% away in death is clearly very unfair when other people choose to fritter their money away and get it all funded by the state without any recourse.

Inheritance is a different kettle of fish and many parents don't think it actually is materially to the costs associated with raising a child at all. Lots of parents continue to help adult children whether it's through funding further education, helping with a house deposit or offering free childcare. Some save money throughout their offspring's childhood to give to them when they become an adult to give them an advantage whereas they could have spent the money on private education and extra curricular hobbies when they were younger which also would have given them an advantage. People seem to have a problem with the former but accept the latter unquestioning when it's all the same thing.

Surely if the money and resource belongs to the parent then they should be entitled to spend or gift this in exactly the same way that they could spend money on luxuries for themselves if they didn't have children. I know a few older people without children that are enjoying very expensive holidays etc with the mantra 'you can't take it with you'. You might want them to preserve all their assets so that the government can tax them at the end of their life but nobody is under any obligation to do that. Taking 10% to cover care costs at the end of life seems reasonable but 40% to spend on whatever the state fancies simply because you died with assets is not.

@Americasfavouritefightingfrenchman- agree with this opinion and have witnessed more than once that dementia sufferers are wiped out of their funds whereas cancer sufferers are not. It's an awful but very unfair dilemma for later life.

That's not mollycoddling; it's the staff cutting back the service for their own convenience. Possibly understaffed because of tightarse owners maximising their profits.

It's a lack of care.

Not allowing residents to walk outside or sit in the garden - they may fall
They can sit in bed, or in a chair in their room or ina chair in the day room
My brother who had spent his life out of doors was in this situation, I took him out but staff didn’t yet would take themselves outside for a fag

I don’t think it’s right that the NHS is free at the point of use but social care is not.

My DF had a rare blood cancer. The cost of his medication was thousands per month. Added on to that weekly blood transfusions and several hospital stays over the two years of his illness. And then two weeks of hospice care at end of life. All of this was “free”, yet if he had dementia, Parkinson’s or similar, then he would have had to have paid. That doesn’t seem right.

I would happily pay 10% Social care levy to mitigate against having nothing to pass on to my children. Most of us accept the principle of socialised health care so why is socialised social care questionable?

People in care homes are molly coddled - @Corianda.

I've heard it all now. Do you actually know what mollycoddled means? It's always disapproving in its implication of excessive care and protection.

What more bracing and regime would you approve of?