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

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.

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?

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.

'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.

'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?

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.

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

Yes. It’s not an alternative, it’s an extra for social care.

My quibble isn't particularly with people having money at the end of their lives - it's the idea that they should be able to achieve a final lump sum by avoiding paying for something. Moreover, it's about expecting everyone else to pay for you instead, even those who will not be fortunate enough to receive anything.

Really it's the recipients of the inheritance I find most entitled - 'everyone else should pay so my parents/relatives etc don't have to spend my money'. Talking about fair and unfair when really what it boils down to is disappointment you won't get your cash is pretty crass.

Wanting to leave money to your family may well be a 'natural' thing to want to do - but if you need to pay for stuff then you need to pay for stuff - that's the same all the way through life, even at the very end.

I thought it was instead of, not as well as.

I totally agree that this is a very self-centred and distasteful way for someone to put it: "everyone else should pay so my parents/relatives etc don't have to spend my money", although I'm not sure I've ever heard it put quite that bluntly - I think people perceive it as implied a lot though.

The main argument as I see it is "all of us [not 'everyone else'] could share this cost so nobody ever has to spend all (or nearly all) of their own money" (and more importantly "so there might actually be enough money for a social care system that works and so people needing care don't block hospitals"), but even then I agree that anyone making that argument who clearly only has their beady eye firmly on the moment when they inherit would be distasteful.

I suppose I just don't think the existence of some greedy people who will always see things in that personal light invalidates the fundamental potential value of sharing/socialising more of what is a non-discretionary, non-universal, highly individual-health-related cost where ordinary tax combined with payments by individuals who need care and have funds aren't between them covering the society-wide costs.

The greedy people will probably also say "the people who are unlucky enough to need care should spend all of their money on it and no one should take a percentage out of my inheritance", if they think their own parents are unlikely to take out more than they put in via such an extra tax. Some people will see every system in that light and not wanting those people to get what they want should not really be a constraint, if a system would otherwise have benefits.

Everybody is so obsessed with taking from those they think deserve to pay more, who more often than not aren't the truly wealthy. Why should people pay a 10% social care tax, or even subsidise the care costs of those who have chosen not to look after themselves? Why is someone who has worked, saved and accumulated assets expected to to be responsibility for the cost of their own care, whilst also subsidising the care costs of others but someone whose lifestyle choices mean they require longer or more costly care can just pass extra costs on to everyone else? Fairness should apply to those who take as well as those who contribute.

How about we apply the same principle of personal responsibility to healthcare that people are applying to those with "more" when they expect them to subsidise others? If we are going to make fairness, personal responsibility and the greater good the basis on which people are expected to fund their own care, then surely those principles should apply to the costs people impose on the system too. Taxes are not free money to be wasted. Every £1 spent dealing with avoidable ill health is £1 that cannot be spent elsewhere.

Why do people think that it is so binary.... people who "did the right thing", saved up, bought a house, got a private pensions... and the opposite... people who could "chose" not to look after themselves, so get to their 60s with no assets to speak of.
A lot of people fall between both extremes, and some people who get to their 60s with nothing were not out spending every penny to make sure they get a place in a shitty council run care home. They may have been low earners, carers, or disabled.

That's my point, it's not binary.

I don't assume that someone who reaches 60 with no assets has been lazy or irresponsible. There are a whole host of reasons why they might be in that position. Low-paid jobs, they have been a carer, they have a disability, they haven't taken personal responsibility for their finances or health, or a million things in between. Nor do I assume that someone who reaches 60 with a house and a private pension has just been lucky, is wealthy, has had some unfair advantage or is somehow more able to pay higher taxes just because they have assets.

My point is that across this thread and others, people are very comfortable splitting people into two groups. If someone has accumulated assets, it's all down to luck or unfair advantage, and they have a "personal responsibility" to pay more. If someone has little or nothing, the emphasis immediately shifts to inequality, unforeseen circumstances and things outside their control. Personal responsibility is effectively dismissed.

Finances and health are the result of a mix of personal responsibility and luck for most people in this country. If you want fairness and expect people to contribute financially what they can, you should also expect everyone to minimise their costs where they can and for as long as they can.

Why should personal responsibility only apply to those who you want to take more from?

Everyone should pay so via income tax could be fairer. There won’t be much point having anything before long.

Obesity costs the NHS billions, it’s pretty much avoidable, can be self managed, but treatment is free from the NHS. Why is the same principle not applied to dementia sufferers, which is less avoidable?

Which would be fine if the playing field was level but it isn't - you don't have to apy for eg cancer care but you do need to pay for dementia care. If people with cancer had to pay for their care then it would be 100% fine to expect families with dementia to pay for care but that isn't the case. It basically depends on what the parent gets in the lottery of end of life health problems as to whether or not they ahve to pay and can or cannot leave their estate to their children. That is the problem not how much anyone has to pay to fund it.

Why can’t people simply pay for their own care from their assets? Will your suggestion cover the cost of care or will we all face increased taxes so you can get an inheritance?

What a ridiculous example.

Not a ridiculous example at all. I said up thread that DF died recently after a fall lead to a stay in hospital which gave him necrotising fascitis. A quick death with no care needed. MIL and FIL both died of cancer - all care paid for and in MIL's case for quite a long time. DM - dementia - care not paid for. You may say that we are lucky we only have to pay for 1 out of 4 but the point is that DM and MIL have similar care needs and one was paid for by the state and one wasn't - so DH and SIL got to inherit everything and DB and I don't - despite the care needs being pretty similar. How is that fair?

There is unfairness there but it's got nothing to do with your DH and SIL getting to inherit but not you and your brother. No one has any entitlement to inherit money, at all, ever.

The only people who have any entitlement to that money (or any money) are the individuals it belongs to (and then only after they've fulfilled whatever tax or other similar obligations they have).

The unfairness here is to the individuals who own the money, in this case your in-laws vs DM, because the current rules treat different conditions so differently. There is no unfairness to you or your brother or any other beneficiaries - there's bad luck, yes, but not unfairness, because there's no entitlement to inherit (otherwise the state would have to do something to somehow make everyone inherit something).

So a side effect of someone having less of their savings taken is that their children may inherit more (or the local cats home may inherit more), but that can't ever be the point of trying to make the system fairer. Not least because if you do a higher tax across the board then that will mean certain other people will inherit slightly less.

The point should be to improve the system overall as in make it actually work better and to remove some of the unfairness of catastrophically high costs hitting some people but not others due to the lottery of illness.

If you expect me to pay for my own care, then why on earth should I pay for your care (through my taxes).. just because you can't afford to pay for it yourself?

We're either a society - who all pay in, and all get care when we need it... or we're not.

That's why your taxes need to increase.

It's not to pay for my care (leaving me more money to spend how I like, including giving it to my children). My taxes are paying for that.

It's to pay for your own care, if you need it.

With either a 10% death tax or else a 1.8% income tax, the richer person is going to be putting more in as it is - already subsidising you. Why on earth should they subsidise your care, but not even get the shared benefit?

Personally, I'm not particularly happy with subsidising you with a percentage-based tax at all.

What would actually be fair would be a genuine government-run insurance scheme where everyone paid the same fixed rate insurance premium (regardless of their age, health or risk) which covered all social care. And everyone has to pay that same insurance premium by law. Everyone. Regardless of income. And everyone gets the same care costs paid out of it. Everyone.

And if benefits have to be increased so that people can pay that fixed social care insurance then at least it's obvious that this is another cost of welfare being borne by taxpayers.

Instead of hiding it by taking more and more from the same tiny group of net-contributors whilst everyone else just expects to get everything for free - and somehow feels hard done by if they have to contribute at all, even when they are being subsidised.

And I agree with @mosaicwasthebest that it's completely inconsistent to share the costs of people needing medical care (using the NHS)... but exclude Alzheimers and the illnesses of old age. It messes up the whole system - as inconsistencies usually do.

That insurance I mention- paid for equally by absolutely everyone,and used to provide care for everyone - should be extended to medical care.

Same guaranteed rate for absolutely everyone, with no medical exclusions. Compulsory by law. But treated as a government-backed insurance fund. Government-run services like hospitals snd ambulances paid for directly from it, and people able to claim from it for all non-urgent care, to break the state monopoly.

That's what most European countries do, and it works far better than in the UK.