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

[TourdeCrema]

So Andy Burnham is looking at a 10% death tax across the board instead of the system we now have, where social care may wipe out your entire inheritance and you don’t get a penny.

paying for everyone’s social care through the death tax

so if you leave £350k house and your parent had 5 years of care, you sell the house and pay £35k to the government and keep the remaining £315k.
presently you’d walk away with £0 as the social care would take the house cost

i think this is a much more reasonable suggestion, than walking away without a penny if my parent needed care( both my parents are dead, so it won’t affect me now)

Treatment for obesity saves the NHS a fortune by preventing diabetes and all of the conditions it can cause, heart disease, strokes, orthopaedic damage and a host of other conditions aswell so treating obesity is seen both harm prevention and cost saving.
Dementia care is about about managing mental decline as really there is no cure or effective treatment so nothing to treat and no money being saved in preventable illnesses.

I am not defending the position just explaining the rationale behind it

At 70, I'm definitely in favour of a 10% social care levy on all estates above £10k. It's not a decision that would benefit my heirs, because it will mean they will start to pay tax at £11k, rather than at £1m.

As we're currently in decent fettle, with only one parent still alive, we've already started making PETs towards house purchases for the kids. We took our tax-free lump sum from our DC pension when it looked like the Chancellor would restrict values, and prompted gifted almost all of it; our mortgage was paid off and we have saved sensibly from our earnings over the years.

Only one of our four parents needed a care home, but in four years those costs swallowed 60% of the value of that couple's property.

One of my cousins dipped out even more. Her father was diagnosed with early onset Alzheimer's disease in his mid-50s, and by the time he died at nearly 80, his care had absorbed the entire value of the two family properties she and her husband inherited, and a majority of the value of their own family home.

I'm so sorry for your cousin @Papyrophile , and your aunt/uncle. Alzheimers feels like such a thief of life, and onset so early is heartbreaking.

I think what I find so wrong about the way our system currently works is that since the cost isn't socialised (unlike all other illnesses in the UK), it feels like those who are already unlucky - in getting the illness - are then doubly/triply penalised.

They not only have to fully fund their care - unlike those struck down by any other illnesses - but then in addition, a full third of their private home fees are used to subsidise those with the same illness who are 'state funded'.

So not only was their own risk not shared amongst the population... but the risk of strangers who can't afford their own care also isn't shared amongst the whole population. It's primarily paid only by those people already unlucky enough to have the illness themselves. They pay a 50% surcharge over the real cost of their care to cover people the state is meant to be paying for out of everyone's taxes.

It's completely insane that care fees for someone in the UK (anyone who isn't completely broke and dependent on the state) are actually more in nominal terms than they would be in Switzerland - a country with twice our GDP per person, and much better care - simply because there's no easy way in the UK to insure against the risk, and the government steals from those 'broad shouldered' mugs it has over a barrel.

Why is it that in almost every other situation where a person has bad luck or a need - illness, disability, unemployment, homelessness, children they can't pay for - the state steps in to fill in the gap...

...but just for Alzheimers and Dementia, the state instead uses the vulnerability (the need for a care home) to actively steal from the person

The state knowingly underfund the care they are responsible for (for other people, who can't pay for themselves). The state is completely complicit that the care home will take the shortfall from the self-funder - who has no alternative - by applying a 50% surcharge on the self-funder's care fees on top of what the state pays for the exact same care.

Hundreds of thousands of pounds, stolen by the state from each vulnerable self-funder, to personally pay for a stranger's immediate, expensive care.

That's the real scandal in social care.

The better answer is that we all buy an insurance policy that would pay out in the event of care costs. That way if affects everyone equally rather than the people that worked and saved.

It should never be that those that worked to own property and have savings, pay for those that were living in a council property and not saving.

It would actually be pretty easy to fix as well.

Legislate that care homes can't charge more for self-funders than they do the state (and include 'extras' in that!). Of course, fees the state pays would have to go up to reflect the real cost, so there's no incentive for the government to do that (except actual fairness)....

And also encourage insurance companies to create a suitable insurance product for care. I'm thinking a 'whole of life' product, maybe capped (with continuing cover) after a certain number of years of premiums paid. It would have to be underwritten, so people couldn't start it after symptoms start, but perhaps some limits on what factors can be taken into account. It could even be incentivised by eg letting people pay the premiums pre-tax, like pensions.

Incentivising private insurance in that way (like pensions) is more realistic - and will almost certainly end up better value - than a government-run National Care Service.

Anyone who doesn't buy the insurance has to use their own assets including their home. And the state (ie taxpayers) pay the eventual care home fees for those who can't support themselves,as usual. (Pays for state-funded fees, not insurance for them - otherwise we'd end up with fraud.

Making premiums pre-tax incentivises people to make contributions through their life, rather than trying to force them to (which is expensive, and always ends up with loopholes)

It's simple, and would work.

How does the principle differ from NHS care though?
We all pay for that, regardless of income and assets, and we all take (or not) from the system equally.
Social care is an extension of healthcare but because it is largely used by older people, the spiteful comments start.
Would you suggest that parents of babies that needs a lot of expensive special care at the beginning of their lives should use their assets to pay? So why is it any different at the end of life?
Social care needs to be addressed urgently. The fact that some familes could avoid paying it or the conviction that today's younger people will not get as much as today's pensioners should not be barriers to finding a solution we will all benefit from.

The problem is that those who have assets/house/ savings in old age pay, the lot if necessary but the ones who offloaded the money in a timely manner or saved nothing get it free - how can people keep saying the rich should pay - it’s a huge incentive to get it put in a trust

This - one of the clearest arguments I have see against the iniquities of our current care system for those with dementia illnesses. It is so cruel as we do provide care (albeit woefully inadequate) for other mental illnesses. Quite why dementia is singled out for this unfairness is beyond me.

Slippery slope, 10 per cent for dementia care. Then the left demand another 10 per cent to pay off student loans. Then another 10 per cent to build social housing etc. After all, the person being taxed is dead. Income tax started as a shilling in the pound to fund the Napoleonic wars. Eventually, the state will get the lot and by and large waste it.

They can't squeeze any more out of the living, so now they plan to tax the average dead person. Their next wheeze will be a property tax on all houses, even 200k ones. If you can't afford to pay, they will take a charge and apply interest. They will sell the charges to banks in order to raise yet more money to squander. The banks will start charging homeowners rent on the part they own.

Is it a 10% levy in addition to current IHT rules, or instead of?

Unpopularly, I think in addition to would be better, and it should be ringfenced for providing social care for all who have been assessed as needing it for free at the point of use. I also think that since pretty much all social care would be state funded, the state should work with the sector to find a cost effective way of delivering the standard offer.

I don't really have any skin in the game as both my parents have passed away. One had no social care needs and the other qualified for CHC for the last few months of life when care was needed.

I agree that it should be paid for as a collective risk for everyone and not just fall individually on the individual needing care. The NHS was meant to be a cradle to the grave service and people need care because of health problems regardless of their age. I also agree with percentages rather than a flat rate of the maximum an individual should pay for care, which would mean that someone with a modest income and average price house would lose everything to pay for care while very well off people would keep a high proportion of their assets and people without assets would get everything free.
My mother was in a nursing home for four years. The people paying and the people funded by the local authority got exactly the same service as did the patients on CHC. Paying did not secure a better standard of care.

Do you think more people would opt for a care home if it was essentially free? If the threshold to get the free care for middle classes has to be assessed by social care would there be big battles and tribunals over care awards like there is with SEN funding? What would the standard of the free care home be - would people have to share rooms like they do in an NHS hospital? Could you opt to pay a bit extra and get a few more facilities (private room, ensuite, better meals)?

Well, I suppose we all have the chance (assuming no long standing or birth disability) during our lifetimes to plan for old age and the increasing probability of frailty, dependency, immobility and need for care. Whether that’s something relatively minor like no longer being able to drive or manage your own housework and home upkeep, or the full-blown need for physical assistance in every aspect of daily living, it’s possible to conceive it happening to you and to plan for it. It’s not spiteful to propose that everyone should be involved in making provision for their later years, surely?

And yes, I absolutely agree that it needs to be addressed. And I wish that the discourse would make clear what exactly it is that the new rules and funding, as and when they are introduced, will cover. I think people might get a shock to discover that accommodation, food, social activities, laundry services, haircuts, foot care, carers accompanying residents to medical appointments- all the things that make living in care pleasant and a good alternative for the person concerned and their family- will still have to be self-funded.

@BigSkies2022 Given the huge sums involved in dementia care, is it not spiteful to say that those who did make provision for their later years must spend everything they have - right down to £14k - to pay not only for their own care but also for the care of those who didn't make provision for their own old age? Even after a lifetime of paying through high taxes for those same people who didn't support themselves?

I think it is.

I think after a lifetime of paying and paying and paying for other people (pretty much anyone who has built up assets over their lifetime has also paid huge amounts of tax: on the income they earned to buy those assets), the state should actually fulfil their side of the deal and provide funded care for the person with Alzheimers.

If, for a section of society, the state only ever takes - and never provides - how can it be considered a society?

A society must be reciprocal. And ours no longer is.

As things stand, this won't work for anyone with complex medical histories because a) insurance companies won't cover them and b) private hospitals will send them back to the NHS there are no A&E or intensive care facilities in private hospitals.

I don’t understand the distinction between Alzheimer’s/dementia care and other kinds of illnesses that are fully-funded, no. What happens for patients with other long term degenerative conditions, such as Parkinson’s or MND? Is their care funded when/if they reach a point where residential care is needed? Again, I am not sure if the proposal is that Alzheimer’s/other degenerative and terminal conditions be treated like end -stage cancer and all costs, including accommodation and food, be covered- as in the rarely available Continuing Health Care packages that it seems a vanishingly small number of patients secure.

I’ve looked inside more care homes than I ever wanted to in the last couple of years, helping sort my dad’s care. Some are as glitzy and beautiful as 5 star hotels. Some have been sorrowful shitholes. Some in the latter category that I have seen had Good ratings from the CQC. Didn’t stop them being miserable shitholes. Some in the former category don’t accept people with vascular dementia, because they can be physically robust, but frightened and aggressive. Possibly averse to being washed and their clothes changed. Patents with dementia exact more demands on staff time and skill and maybe need very different environments and care.

I have no clue what the solutions are, except that keeping things as they are rather than moving to some form of shared risk either levied on all estates, or through working lifetimes, or both, is essential. But even then, if I want to pay for the 5star accommodation option, I should have the option to do so.

In France, health is by insurance - mandatory government insurance pays back most of your care, and most people take out a mutuelle insurance for the rest. Neither consider or exclude existing conditions.

https://www.fabfrenchinsurance.com/health/understanding-the-french-healthcare-system-101-a-guide-for-expats/

In Switzerland, basic insurance doesn't consider existing conditions but supplementary insurance does

https://expat-savvy.ch/blog/pre-existing-conditions-swiss-supplementary-insurance/

The Netherlands works like Switzerland.

These countries all have insurance-based healthcare, and all rank higher than the UK for overall health outcomes, patient access, and system performance in major international healthcare comparisons.

My personal experience shows how much better the access to healthcare is too.

Unfortunately, changing our NHS model to insurance-based would be hard and take time. I'm not convinced that our state institutions would manage it.

But I was talking about Burnham's proposed National Care Service.

When setting up a whole new national service, why on earth would he propose modelling it on the NHS - which works so badly, and is basically breaking down - instead of on the European insurance-based services other countries have shown work better?!?

Sheer Hubris, ideology and lack of vision is the unfortunate answer...

My concern would be that if Britain went over to an insurance model it would be far more Americanised than systems that work well across Europe.

Yes, plus how the transition would be managed, with the risk of people falling through the cracks.

Of course everyone should save for the future, but again, why is this treated differently to other things that happen in old age? Why isn't there social pressure on everyone to save up to pay for treatment for the increasing risk of cancer as we age, but there is for care required for Parkinson's? Why does planning for dementia and Parkinson's come under personal responsibility, but not planning for cancer?

I do think there's something worth unpicking here about how we see 'care' that a person can't provide for themselves vs how we see medical treatment. I think there's an unacknowledged assumption that because you don't need medical qualifications to provide some types of 'care', then it shouldn't need any state support. But the whole problem is that this is still something the person can't provide for themselves - as in, physically can't do it, rather than being unqualified to. It's not optional outsourcing like paying for a gardener, a mobile hairdresser, a cleaner or ready meals, where the fallback option is just to ignore the garden, not get haircuts, accept a dirtier house and live off bread and jam. The care is both essential and specifically related to certain illnesses.

Anyway - I don't have a problem with old age naturally bringing increased costs that we have an obligation to prepare for and then to try to meet ourselves. I do have a problem with the inconsistency of how different disastrous illnesses are treated. I also strongly suspect that because so much unpaid caring is done by women the unspoken assumption is that that's how most of it should happen.

I think the point about things that are excluded is important to remember but it's also worth thinking that getting better versions of those (nicer food, a nicer environment etc.) is something people will feel very positive about saving for, especially if they know that if they end up not using it (or choose not to pay for the fancier versions) they will be able to leave what's left of their money after IHT to their children. It's much harder to feel positive about saving if you've ever witnessed how fast funds are swallowed up if someone is unlucky enough to get dementia or Parkinson's. It makes saving feel both grim and a bit pointless, as if you're a mug doing it at all, knowing that people in the rooms next door to you in the care home will be getting the same care for free, even subsidised by you.

In the UK the ‘social pressure’ to save up to provide for the costs of cancer is met through compulsory taxation to cover the costs of NHS treatment. Other costs associated with cancer might be met by sick pay (so by your employer) or possibly by the individual through critical illness insurance. But as I said before, I don’t know why there is a boundary drawn for certain conditions (dementia in its various stripes, for example) which places them on the social care, rather than medical care, side. You would still get medication for such conditions funded in full, I think? There may be other elements of care which fall on the medical rather than social/personal care side and from all that I have heard, these judgments might vary from one authority to another, and over time, fewer people have been in receipt of funded care, although more should be eligible (working age adults living longer with serious disabilities, increased elderly population with more complex health problems, more single person households). That shows care is being rationed already without expanding the definition of who qualifies and with what conditions.

it’s a mess, I agree, and we’re already paying for it. Personally, I wouldn’t mind paying a percentage point more tax throughout my working life to try and smooth out and pool the risks. I don’t want my mother (or me! Or my husband) to be put to bed at 5pm in a nappy because that’s when the local authority service has capacity, and there’s no resource to fund extra visits on a 9pm round, and someone to help again early in the morning. At a certain and predictable time slot, not ‘between 7am and 9am, oh and it might be a different person each time.’ And this is not a free service, btw, but one to which the recipient makes a means tested contribution. Is it any wonder that people will live in any amount of squalor and peril rather than seek statutory help?