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

@frozendaisy

I understand that but the system, services, is broken. With many people needing care in hospitals when those beds could be used for medical patients. So people becoming more frail and isolated because they are on long waiting lists.

Massive mistake to close down the convalescence homes where such people would have been moved to from hospital at the end of their "medical" care, but prior to returning to their homes. We had three such places in our small city, all pretty large with hundreds of beds. But the buildings were old, asbestos ridden, and needed replacement, but of course, no money to invest in new buildings, so they just closed them down in, I think, the 80s and 90s. Not all the wards were for OAPs with hip operations etc., some were mental health wards. Some wards were for recuperating accident victims, such as my brother who spent a few months in one after a bad motorcycle accident - he'd spent a few months in hospital having operations and awaiting his broken femurs to heal, but was unable to return home, so they "parked" him in such a ward in one of the convalescent hospitals where he got physio treatment, practised walking again, until he was capable of moving around himself when he was finally discharged home. There was a massive move to "care in the community" when these convalescent and mental health wards were closed down, which really makes no sense as it's a lot harder and more time consuming to "care" for people spread around all over the district rather than in one centralised location, so that the likes of nurses and carers can now only see a small number of patients in a day due to the travelling around, when they'd have been able to look after a lot more if the patients were all in one place!

Totally agree that you should pay for your own care.

I think the issue with the social contract is the ratio of old to young has changed.

They absolutely paid for thier predecessors and did what was asked of them, but when pensions were set up it was 5 people to a pensioner, its steadily declined and now its 3 people per pensioner. There's plenty of men and women who retired at 60 or 65 still, where as current workers will be 67, 68 or older. So 'my contract' is to support 1/3 of a pensioner and working until 68, whereas my mum probably averaged 1/4 of a pensioner and retired at 60. Can I ask my child to support 1/2 a pensioner and retire at 70 and just say "thats the contract'

We do have to acknowledge the terms of contract has changed quite a bit over time and perhaps inheritance tax needs to change to help a bit.

I'd be surprised if Burnham can get it approved by his back benchers. Because it's basically a tax on "normal people" rather than a tax on the rich which just doesn't fit with the left wing of his party who are obsessed with the politics of envy, spite and hate. I think he'll have to offer them something to get them on board with supporting the 10% rate. Maybe tiered rates so that "the rich" still pay a lot more or maybe keep a relatively high threshold of maybe £500k or so. By the time they've "fudged" it to keep the back benchers happy it'll probably not raise enough.

I was wondering the same.
I had a friend who lived with her dad, and when he died she got the house they lived in. She is on benefits and would not have been able to pay 10% of the value of the house.

I understand that but the system, services, is broken. With many people needing care in hospitals when those beds could be used for medical patients. So people becoming more frail and isolated because they are on long waiting lists.

I think a good stepping stone would be to have halfway care, say for hip replacements, where the care becomes physical not medical for a finite period.

And then the discussion needs to return to assisted dying. If dementia effectively makes you a care home prisoner, you don’t recognise anyone you cared about, you have absolutely no autonomy over your life. Who wouldn’t want to “slip away” with dignity?

It’s very complex.

Need, dignity, possibility, cost, staffing, buildings, agreement, access, choice.

Everyone has a perfect vision of what they would want without wanting to pay for it.

A complete overhaul needs to be thought out, from the first brick upwards, if it is to in anyway succeed. It should take years not thrown together in a few months.

Yes - but they wouldn't be paying any new additional NI social care surcharge - despite the fact that they are the ones needing it. I can't see the working population being too pleased about that imbalance.

I’d rather not pay more tax when alive and I’d rather hand loads to government when I die as I won’t need it then

I don’t want to financially benefit from family death

and looking at the data , if we got rid of big inheritances then we could see a continuation of the rebalancing of house prices which would be good all round

if you want to give something to your kids do it now.

They pay income tax though, if they have an occupational pension. And they will have paid for the care of their predecessors all their working lives, too.

It's how the social contract works.

Yes, of course that's what they'd tell you. You underestimate social stigma.

I think that happens now for people who would be financed by social services as they have no assets.

I can’t see the sums adding up, tbh. 10% seems way too small.

I am sorry not getting this - so to protect inheritance for individuals if their parent needs social care then the whole country has to pay extra to make sure the children of this parent can get their inheritance? If someone needs social care their assets can not be used to pay for it and others will be subsidise them? Surely I have misunderstood?

I imagine that the tax would be deferred on the first death just as assets passing to spouses currently attract no IHT. It would actually still be a money raiser because a jointly owned property is normally ignored for care cost calculations if it is still going to be occupied by eg the other spouse.

Social care for the elderly needs to come from that generation, somehow.
If they are leaving a property there is no doubt they have increased their estate, sometimes by many 100% on unearned, untaxed value.

A big issue though will be if social care is free there will be an influx of families putting elders into care so whilst right now it might seem like a good idea there could be the problems of over subscribing and within a short period of time no more space.

If they work with the NHS and people are placed due to need not want it might be guarded a bit.

We know what people are like, they will bleat “I am paying 10% on my £300k house, so £30k, I am entitled to £500k care now” etc etc

It’s very complicated, but payment for elderly social care should come from that generation somehow. Or leave as is and those who need pay full amount or families look after to keep the cash.

Because one of the principles behind the way our economy works is that we pay collectively for services that benefit society as a whole, rather than pay for them individually.

Imagine how many people would die if the ambulance service wasted time working out if the injured were entitled to it free or not? Should all roads be toll roads, paid for by those who use them? Would I be able to opt out of the bit of my council tax that pays for child protection because I've never had any kids?

The money you pay towards care means you would be able to access it, too, should you need it.

This is wrong.

Read Dilnot.

100% agree. Id pay 10% of everything I have if it bought me a guarantee I'd never get dementia.

THe problem with this is that the generation who need care now don't pay national insurance when they retire - so yet again the workers are hammered whilst the retired generation who are creating the demand sit with their triple locked pensions. It will make resentment (or rather increase it) and it is a long term plan whereas the problem is current. The death levy is a quicker and fairer fix.

Because collective responsibility is what keeps society functioning. It’s why everyone’s tax pays towards healthcare, education, etc even if you yourself don’t need it.

What if you care for/nurse your parents yourself. Why should you then have to pay for other people's care home costs?

How are people saying they would feel hard sone by if they didn’t use the dementia care? I’d much rather pay 10% and not have dementia, that “get my moneys worth”!

What would happen if you own your home as joint tenants.Would you have to sell your home to pay this if your partner died and you didn't have the funds.

No, you just remove PETs at the same time as IHT so that gifts in lifetime (over a certain limit, say £10k) are also taxed at 10%. You provide no exemptions to the new tax - 10% on all estates and types of assets to avoid structuring, the only “exception” being a deferral of charges due on assets passed to a spouse until the second death.

Trusts do actually pay an alternative form of “IHT” already: a smaller charge but at regular intervals rather than on generational transfer, so that could be left in place which would actually make it more expensive to operate a trust than to pay the standard 10% charge upon death, so discourage their use.

This would be a far fairer system. At the moment many people with fairly substantial estates pay no IHT, the very wealthy pay hardly any, and the few in the middle get hammered and take steps to try to avoid it. Far better to have an unavoidable tax that isn’t really worth trying to avoid (and no loopholes to do so as it would be very simple). Everyone pay a fair contribution. Then social care isn’t a lottery of health. Also a capping of liability at 10% would mean insurance products to cover it would be affordable if people wanted to take out such insurance.

It would raise roughly £36bn so if you abolish IHT and deduct what that raises currently, the remaining funds are sufficient to cover care for everyone (not accommodation and food costs, but no country on Earth covers those as well as the care itself) and leave significant headroom (good given the ageing population so costs being likely to rise over time). The tax should be hypothecated and put into a fund so that the surplus can compound to provide a buffer to ensure the tax rate doesn’t have to be raised in future.