To think older people need to sit up and take notice of this

[OwlOfBrown]

So the Tory manifesto includes a plan to make (elderly) people pay for their own social care costs until they are down to the last £100K of their wealth. Andrew Dilnot, who chaired a commission on social care costs during the coalition government which suggested a cap of £35,000 on care costs borne by individuals, has condemned this plan.

www.theguardian.com/politics/2017/may/18/tory-social-care-plan-example-market-failure-andrew-dilnot

www.bbc.co.uk/news/av/uk-politics-19286845/andrew-dilnot-on-social-care-cap-and-inheritances

I know a lot of MN'ers will say that this is fair, and I do have some sympathy with that opinion. Why should someone be able to sit on hundreds of thousands of pounds of wealth when the state pays for their care? But is it really fair? What about when others have the same amount of wealth but enjoy the good fortune of not needing social care so get to keep their wealth? After all, we don't make people with long-term illnesses pay for their medical treatment (yet...) so what is different about social care?

Debate away - I'm interested to hear other people's opinions on this.

Yes - this proposal is not aimed at the mega rich, who are already paying for their social care as they obviously have more than £23k in savings.

The specific group affected by this proposal is those with less than £23k in financial savings but who own their house. They previously would not have paid, now they will. Whatever the rights and wrongs of the policy, it does not affect the very wealthy.

I am approaching 70 and have a lot of experience of the Care System. I am at the stage now where, instead of seeing our older relatives needing care, it is happening to our peers.

Have those of you that are talking of selling your house and giving money to your children really thought about what it means to live a long old age with failing physical and mental health? Keeping your money means you can pay for the exact care you need. Not having to rely on someone who is 30 minutes to dress you, give you breakfast, give you meds, empty and clean your commode and make your bed.

It means your partner can have some life to pursue hobbies, do shopping, visit friends, without having to take an unstable person with them constantly. Or worse still being a prisoner in the home because the person cannot be left.

It means you can adapt your home to make it safe and comfortable to cope with your disability.

I can't help feeling that some people are very naive about how long they might live with a physical or mental disability. What it is like to see a loved one unable to do basic things for themselves. What it is like for ther person themselves to be robbed of dignity and self-respect.

I doubt knowing you have cheated the system and given your money away will be much comfort to you.

Fair comments

Lets say you are married, one of needs care and then dies. You have a house worth £200,000. If the care costs amounted to £100,000 when does that debt become payable?

1. At the time of death? Does this mean that the surviving partner now has to sell the family home to pay of the care bill debt?

I cannot find any mention of this in the policy statements.

I think if there is anyone left in the house who is over 60, a charge is put on it.

Well I suppose it would be possible to downsize, make life easier and still keep some saving as well as give some to children Astrantia? Good pint though about leaving yourself without options.

Hands up who knows any elderly people living in very expensive houses getting 24/7 care paid for by the state. Their family never calls, never visits but they refuse to put them in a care home because they want want their inheritance.

If you want more than £100,000 inheritance then start looking after your parents and stop expecting the state to do it for free.

Excellent points Major. First and for most, you have to enjoy your money. I'm keen to understand what the impact would be for the surviving partner. After all it is often the partner that does so much of the caring and it would be horrendous if they had to them sell the home to pay off the debt.

1. At the time of death? Does this mean that the surviving partner now has to sell the family home to pay of the care bill debt?

The surviving partner gets to stay in the house for life as well.

Thanks Jamie, is there anywhere that this is explained?

Lets say the partner dies. The house becomes too much for the surviving partner so they decide to sell and downsize. Does the care bill then become payable when the house is sold? If not, when does it become payable?

Wynona - Just read it in the paper this morning.

"pensioners will not have to sell their homes to pay for their care costs while they or a surviving partner are alive. Instead, products will be available allowing the elderly to pay by extracting equity from their homes, which will be recovered at a later date when they die or sell their residence."

spot on AstrantiaMajor

Hands up who knows any elderly people living in very expensive houses getting 24/7 care paid for by the state. Their family never calls, never visits but they refuse to put them in a care home because they want want their inheritance.

Sadly in my professional experience there are many many families out there who delay getting appropriate help for their elderly relatives on the basis of money and inheritance. Seemingly nice decent people do very strange things sometimes when money is involved.

It is highly unlikely though that 'the state' will pay for 24 hour care at home though. Virtually unheard of these days as local authorities usually set a tipping point at which they will stop funding at home and insist that if the person wishes to continue to receive state funding it must be in the most cost effective way e.g. in a care home. People who have savings can pay the extra to stay at home if they choose to. People without savings who are wholly reliant on state funding get no choice. Those who intend to dispose of their assets to avoid funding their social care in old age need to remember that.

Lets say you are married, one of needs care and then dies. You have a house worth £200,000. If the care costs amounted to £100,000 when does that debt become payable?

1. At the time of death? Does this mean that the surviving partner now has to sell the family home to pay of the care bill debt?

The surviving spouse carries on as before, when they die the state takes the outstanding bill from the estate at that point.

Lets say the partner dies. The house becomes too much for the surviving partner so they decide to sell and downsize. Does the care bill then become payable when the house is sold? If not, when does it become payable?

Yes, that's how I understand it - the surviving spouse will be left with min £100k

It would make sense for the spouse to downsize at the point the other goes into care in this instance.

Under the current rules, in this specific example, the surviving spouse would only be left with £23k of the dead spouse's estate, so this system is fairer.

I think my OH and I typify the opinion split on paying for social care.

His view is, we had nothing when we were children.We went without and saved for things. We were poor when the children were at home, living in 3 rooms in a shared house, with no bathroom, and a toilet in the garden We scrimped to buy our first house and first car at 40 Through hard work, got promotions and managed to pay off our mortgage and take early retirement. He says that he is willing to pay for his own care, but does not think he should have to pay extra tax or pay N.I to cover it.

My view is this, we have been very lucky and and extremely fortunate to be in the position we are. Yes we worked very hard, doing more than one job. Yes we went without and never had any loans or credit card debt. However, we were lucky, in that we lived in an era and in an Area with no unemployment. We were lucky to enjoy good health. We were lucky to work for companies with good final salary schemes. We were lucky to be able to buy our Council House and to see its value rise. We are comfortable. Being frugal people we do not run a car now or have expensive holidays and we do save money every month.

I don't see why, having paid tax and NI all your life should stop when you are a pensioner. I would be happy to contribute to a Social Care fund, because I am so grateful that I have enough to fund my own care.

The council have the power to reclaim monies given away from those the money was gifted to. If you can't pay it back, then they expect you to sell your assets to clear the debt. There is no limit on how far they can go back when looking at the finances of someone who is now claiming care costs. Councils are going to be more likely to pursue the recipients of gifts in the future as they scrabble around for money to make the books balance
😮
Guess I'll be giving my children cash only from now on!

Lets say you are married, one of needs care and then dies. You have a house worth £200,000. If the care costs amounted to £100,000 when does that debt become payable

At the moment if the house is jointly owned only half the house would be considered to be part of the person needing care's assets anyway. It doesn't get taken from the spouse or say a sister living in the same house. Caveat - I believe this is the case. It may depend if you hold as joint tenants or tenants in common. But I think I am right because otherwise you could spend everything on one parent/spouse and have nothing left for the other parent/spouse if they also needed care at a later date.

I won't vote Tory, but well done for them suggesting it. People like the op are being ridiculous. Your assets should be used to pay for your care.

Selfish people want the state to fund all their care and still hand down their assets.

fessmess- although I somewhat agree with taxing the 'mega-rich' more, your argument that we work hard so our assets are ours is slightly flawed. The 'mega-rich' can be hardworking too. They probably feel the same way and are already paying more tax.

I'm not opposed to paying for care costs. I think I recall David Cameron say on the live TV debates that we could pay £8000 and then be protected. No insurance company could ever cover such costs to the policy did not get implemented.

If you have to tax people, then when they die is probably the best time providing the loving partner is not made to sell their house or feel trapped in a house that no longer meets their needs.

"pensioners will not have to sell their homes to pay for their care costs while they or a surviving partner are alive. Instead, products will be available allowing the elderly to pay by extracting equity from their homes, which will be recovered at a later date when they die or sell their residence."

I didn't realise this would be done through private products providing equity release - I had assumed it would be a local authority charge on the property. I forsee complaints! What's the compound interest rate going to be, I wonder?

Ok I'm old fashioned but I really don't think it's a good idea for pensioners to have to buy equity release from private providers. (I know they may choose to at the moment.)

how much was a 16% mortgage every month on a house purchased in 1976 please?

My parents bought our house for 3.5k in 1973- it's a huge big rambling thing and is in an area that is very expensive (now). Just wondering what monthly repayment would be at 16% interest rates on a mortgage of a few grand. It's often trotted out as 'we had it bad' but I think it sounds a LOT worse than the reality.

i've just done this calculation :

Your mortgage repayments

If you borrowed £3,500 at an interest rate of 16% for 25 years, your monthly repayments would be:

Interest-only:£46.67 per month

Repayment:£47.56 per month

so, my parents £1m+ house, at 16% interest would've cost them less than £50 a month.

Equity release is a very inefficient way to use the equity in a property, the equity release company makes shed loads of profit via the rolled up interest

117 well considering how decimated our financial services sector will be after brexit I think it shows remarkable forward thinking by the tories to create a whole new sector dedicated to fleecing the elderly and vulnerable.

Good spot neednumbers

I hadn't realised that it would be equity release products. Private companies will not be doing this for free, they have to make a profit and secure the loan.

There has to be a better way.

Well, let's hope it is not true - the reality is in the detail as always!

Of course there is an additional problem that by the time you need social care for dementia issues you may not have capacity to enter into a legally binding agreement - I know that does vary depending on the extent of the dementia.

Talking of detail, any firm news on where the means test threshold will be set for winter fuel allowance?