Where should the cost burden for care of the elderly lie in society - with the state or individual

[mids2019]

I was watching an item on a politics show about the long standing problem of funding elderly care. There was some woman who was strongly critical of the funding middle as her mother had to swell her house to find care home fees. Could one argue that the parent had no need for her house with regrettably a very small chance of return so it is fair for that a set to be used in paying for free instead of the tax payer picking up the cost? It was an elephant in the room during the interview but the person losing the most in the scenario was the daughter who ultimately would inherit less but obviously this was not said.

I don't think there is a simple answer hence successive governments pushing this into touch but where should the cost burden lie, the state of the indiividual?

I think this subject is really co.implicated by the fact that we have universally free healthcare yet a private model for social care. There really is a sinking here. Hospitals will in future not be able to fill in for shortcomings of social care and there are many cases of the elderly taking up beds in hospitals as they can't be discharged without an adequate care package and I wonder if these cars packages are materialistic because of cost? We also get the situation where specialist nursing care is free yet caring in a care home is not so how do we square that circle?

So the 20% income tax pays for everything, including people's pensions and you have a tax allowance of £13k, and now they pay 7 or 11% on top of the income tax and any care they need is funded by the Guernsey Govt? So in Britain, we are paying a lot more for a lot less - big sigh

My limited knowledge of Guernsey is that the entire welfare state is a lot less generous than the UK in many ways.

Yes.
We are paying more for less

However we get an tax free NI allowance that they don’t get in Guernsey. The % you pay for Health insurance is based on tot gross earnings

Its also worth noting that in Guernsey you can put a cap on how much tax you pay for the very high earners.

There’s also NO capital gains tax
and NO IHT ( except expenses if you need a Grant of Probate. Most people don’t need this, we did once and it cost about 8% of the total Inheritance )

People move to Guernsey because their tax system is fare. Wealthy people obviously love it. It draws more wealth in which is a positive for everyone.
The UK do the opposite and the wealthy go running.

Not sure why I'm paying increasing income tax, national insurance and council tax to pay for people's care who are sitting on assets that could be sold to pay for their own care. I like most other working people having nothing more to give!

The system desperately needs a rehaul but no Government would be brave enough to do it until the whole thing collapses.

They have broadly the same benefit system as the UK based it on how much a person needs to live on. Much like the UK.

They do not however pay out as much in top ups to salaries. So if you are relying on benefits as a fit working age person you won’t be getting as much there as you do in the UK.

You're not. You're paying increasing income tax, national insurance and council tax to pay for people's care who have likely not paid much into the tax system... but despite that, if you've managed to save anything over your lifetime, you will still have to pay for your own care yourself.

As an aside the Health insurance system is compulsory but not Government based. The amount you pay in though is set by the Government

The care is paid for through this health insurance company. Underwritten by the Government

According to the ONS less than 40% of care home residents funded their own care between 2019 and 2020. So you're telling me over 60% of people in care homes have no money/assets at all?

https://blog.ons.gov.uk/2021/10/15/how-many-people-fund-their-own-care/

Wondering if this includes all adult social care as it’s not just pensioners included in that bracket.
I thought more recently it was about 50 50. So half of pensioners paying for themselves and half are funded by our council taxes.

Heres a breakdown of where money is going to in terms of age and how that’s changing

Either way, anecdotally I know many pensioners receiving care who have homes that haven't been sold and are sitting on cash. I don't think it's sustainable to expect tax payers to bear this burden of care, but most people seem to think the world owes them a living.

Which swings both ways
Half get tax payer funded fully
The other half pay themselves ( other MN have examples of money topping up the low Government funding, )

In terms of all or nothing
As it can’t be all pay as some people have nothing
then it should be no one pays to make it equal.
This means we need to encourage wealthier net providers to stay here and pay taxes rather than leave as some do
We need to reverse the reduction and maybe increase NI payments ( we are all living longer than when this system was set up )
We need to encourage more people to be net providers to the system
etc
etc
etc

Those who pay for their own care which others don’t also have IHT slapped onto whatever is left ( after min threshold) when they die.

One could say What’s the point in saving or buying a house why not spend every penny you have. Lots are doing this these days as there is no incentive to do otherwise.

Sorry but I think most people work for a living and pay for their own bills etc but some people are starting to wonder why they do, because they are taxed to the hilt and things they used to expect (like getting a doctor's appointment; getting universal Child Benefit; a universal TV licence at age 75; a pension at 65/60; Winter Fuel Allowance) are all being taken away from the people who pay into the system and given to people who don't. Nobody says people should be destitute if they can't work but there seems to be too many who choose benefits as a lifestyle choice and it's no wonder ordinary taxpayers worry that they are being systematically milked for money when they are alive and working; further milked if they have the misfortune to become ill and require care when others get it for free; and then milked in terms of their estate in certain circumstances on death if they die before the state has milked all their money off them for their care.

Yes. 1/4 is covered by the mandatory care insurance, 1/2 is covered with her pension and the rest would come out of savings.
due my dad’s employment she has additional care benefits so her savings are used for anything extra.

Without the extra benefit and when savings run out, people apply for state benefits to cover the gap.
But the state would require all cash gifts in the last 7 years to be returned, property being sold and if given/sold under market value in the last 7 years they can make demands on payments from the new owner.

The taxes you have paid in have been spent already. It’s people paying in today that you expect to pay for your care.
The government WILL take it if you don’t spend it or give it away.
Rightly or wrongly, that’s the way it is.

Yes and that’s why we are having this discussion on MN.

Ps. As posters have paid for social care through their working taxes in their day so when they need it it should be their turn to receive.
But no
We pay through our taxes then when we need it we have to pay all over again for ourselves too.

Thats why people leave or give it away to their relatives

I'm still paying taxes, and don't expect to need elder care for decades.

That's why I'm objecting. I'm not willing to pay for other people's care now - or any of the other ways the government is milking me - without reciprocity: a commitment that if I need care in 30 years time I'll get it paid for as I'm currently paying for other people's.

Sure, the government will make the laws that it chooses. Rightly or wrongly, as you say. But the government would be wise to seek a fair social contract which people willingly participate in.

The alternative is that people find ways to reduce what they pay in and keep more for themselves and their own - whether that's working less to enjoy time with family now, spending and gifting more, finding every loophole in taxes... or moving to Guernsey

And then there's even less for the government to work with, and so it spirals.

Obviously your state pension is used as part payment for your care bar £25/30 ish pocket money / week.
Tbh that’s fare

Most people want a fare and equal system
Pop over to a farmers thread on IHT here on MN it’s all very much ‘ we pay so you should too or it’s not fare’

So if some don’t pay ( over and above state pension) then no one should have to.
That’s a fare and equal system!

I accept that I have a duty to contribute to the social contract but when it becomes punitive, I also have the freedom to choose to live elsewhere, provided I can find somewhere I want to live that is happy to welcome me as a new tax payer in their country. I am likely to exercise that freedom quite soon. I am not going to deny the UK huge sums of tax revenue, only the income tax on my taxable pension, the stamp duty I would pay to buy an over priced retirement rabbit hutch, and any inheritance tax from my heirs. As a quite ordinary forward thinking person, I reckon that the total tax the UK will miss out on is probably close to six figures. From one couple, who have paid wages and taxes for an SME for 35 years.

Wouldn’t they still tax your pension though as income generated in the UK? If you’d have to pay when you drew it down. Not being snippy just something to consider in your financial planning.

It will be taxed, but at 10%. Which will cover the cost of the essential health insurance policy.

@strawberrybubblegum i think the latter option is the most common. Spend it now, whether on yourself, or family. Holidays, weekends away, nice house, exchange via crypto etc etc. I’m sure there are communities in the UK who are much more well versed in asset ‘disposal’ than others.
I live in Switzerland (for now) and it’s no better here. All of Europe runs along the same lines.
However, I don’t think the comparison of people who have done (relatively) well, and the extreme of people who didn’t even try, is fair. Most people do try, but don’t get past minimum wage or much better, and despite doing 40 hours a week, live in effect week to week. Even worse nowadays with the insane cost of housing.
My job pays very well, but to me is no more arduous or stressful, or worthwhile, than driving a bus or being an NHS receptionist.

We are already gifting the money for property purchase to our DC, but mainly because they need a secure roof now, not in 10 years. I have transferred my share of my mother's modest estate to my DC so it never becomes part of my estate. The DC has nothing right now, not even a job.