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)

But at the present time, if you haven’t bought a house and lived in social housing all your life, you get your social care for free.

Also, if you get cancer, you get all your treatment for free and if you go into a hospice, it’s also free.

However, if you worked hard, bought your modest house and paid into a good pension and were hoping you could pass some of that onto your children/ grandchildren, but then you develop alzeimers and need full time care for 10 years (younger patients can live for quite a number of years with dementia), you have to use your savings and then your house to self fund.

It’s not a fair system now. The system Andy Burham is proposing seems much fairer. It’s just like national insurance - some people will need to take far more out of the system than they put in whereas others pay for years and never really need to use it.

I’m an early boomer, 80. Unlike nowadays, we didn’t have information at our fingertips when we were young, so we thought paying income tax at over 30% was normal! It was only reduced from 35% in 1979 when many of us were struggling to hang on to our homes with mortgage interest rates at 17%.

Perhaps higher rates of income tax along with the different age demographics, and fewer people in general is why state funded care was the norm for all but the really affluent. People are now expected to work longer, but our generation worked from 15/16 in full time jobs. Lots of swings and roundabouts.

We’re not affected by IHT, we’d happily contribute 10%.

But by ‘medical’ is usually meant something that needs a doctor or a qualified nurse to do it.

And @Owninterpreter I’m not sure you read my post above.

I have no problem paying my taxes, I’ve paid tax my whole working life and will continue to contribute to society in which ever way I can.

My view is very basic, something has to change as the current system isn’t working. We can’t expect to have services that are not funded, the money has to come from somewhere. Again if you read above, I am against those services being privatised and sucking tax payer money out of the system.

We have had to accept that much of our inheritance has been spent on care home fees, (£6,500 per month) but at least this gave choices of care, at home and then choice of a nursing home.

Brilliant idea. I just hope it goes through and doesn’t take forever. 10 percent on all inheritance is fair I think

She lives hand to mouth as it is. No kids to pass it on to.
Not everyone is eligible for a mortgage.

I think care would be covered but probably not the food and board element( which is kind of fair) . You have to hope that wouldn’t mean homes hiking up their prices accordingly.

Yes it’s just a question of vocabulary. They call it social care but if you were incapacitated in hospital all of those things would be covered by the NHS

ATM before anything has changed how would they pay for their care if they need it?

Just to put another angle on, when I first started working and paying tax at 16 I was 'promised' my state pension at 60.

Due to law changes that will now be 68. (Personally I don't care, thats what private pensions are for.)

What's to stop the government taxing everyone at 10% now then changing the goal posts when the youth of today need care in 70 years time. Do you trust them to look after your Grandparents and Parents 10%?

Agreed.

In which case it’s equity release lifetime interest then. Easier if no kids to take it on, but no way should she be allowed to sit on (her fathers) asset worth £270k (avg home value in UK) for her lifetime for his free care, even if her income is low. That could be another 40 years before the care system gets what it is owed. Equity release it is.

He didn't get free care. He died.
She is too young for equity release.
It is not just an asset, it is her home.

I have major concerns that people aren't reading what has been said carefully enough. The money is going to be used for "care" apparently. It has been pointed out in a few places that accommodation, food, laundry etc won't be covered- just the care you need e.g. getting washed, dressed etc (maybe more for dementia patients)- so you will still need to fork out loads of money. Could be wrong, but a number of people have asked this and nobody seems to have clarified it.

its a socialist idea, on a similar principle to schools and NHS. its just that a death tax would be introduced to pay for old age care home in the same way we had NI started to pay for old age pensions & later on NHS. Or council tax paying for police, local roads to be kept maintaned and free for everyone to use or rubbish to be collected. Some people will pay a small amount of tax and others will pay a much great amount.

My Mum sold her flat to pay for her care. No issue with this. The only issue is that it may still not be enough to cover the cost. I have no problem with paying extra on my own death but do want to be free to buy in the best possible care i can afford and it isn't a problem to sell my own home to do that. I don't get what the problem is with doing this.

I do get that for someone wanting to stay in their own home that it is harder to pre fund this and those that don't have any assets can't pay anyway.

I do want social care to be high quality and properly funded, so no problem if everyone pays 10% of their estate on death, provided there is an exemption for spouses. I do think though that it should apply to everyone not just the very wealthy.

I absolutely think it is fairer than the system we have now. Everyone is at risk of needing care, so everyone pays in to mitigate that risk- only this is an accrued payment made after the fact.

People say 'what about those with very small estates' - they get care free at the moment, a ludicrous situation than makes it a better choice to earn less or go on benefits, and own no assets at the end of your life.

I do think it needs to be transparent from the start as to what it will pay for, and what it won't. Or it will be like SEN education- a cost that seemed affordable when introduced but which has been inflated by ever larger and more bespoke demands.

But if you have dementia and are in nursing care you don't need your house - you can't take it with you and you're very unlikely you'll magically come out of nursing care and find yourself homeless. Passing it on to children is great, if you don't use it first - but if you need care then unfortunately you'll have to use it. Same with most services.

The people that earned the money should use it, their children and grandchildren shouldn't have it if it's needed for care.

It isn't a socialist idea if it's introduced to keep lump sums of money in some families but others don't benefit. Everyone pays for the care and everyone benefits from free care when they need it - fine, I'm all on board with that. But not everyone pays so some can squirrel large sums away for their own private wealth.

But you could say the same about a cancer patient when they go in a hospice.

I don’t object to paying a contribution but care homes around here are around £6000 to £7000 a month. Whereas others get their care for free.

Obviously if you are on benefits you won’t pay anything when you die so makes no difference.

We’re all going to die someday but why do those unfortunate enough to develop Alzheimer’s have to pay exorbitant costs whereas other conditions have their care for free.

Just to confirm - I don’t think cancer patients should pay anything but Alzheimer’s is a very shitty
way to go as well.

My mum is not currently in a nursing home
but is paying for her care at home presently with a great deal of support from me and my siblings which is costing her roughly £2000 a month.
If I could afford it, I would give up work to care for her, but I can’t afford it as still paying off a mortgage and supporting 2 children in university. She is just lucky she has savings which means she can buy in care at home.

Your terminology is strange. People's wealth isn't something they have just chanced upon and are 'squirreling' away. It's money they have most often earned and it belongs to them. You imply that the default is that they should give all this up for everyone's benefit but that isn't what most people want or think is reasonable. The default must be that your money and assets belong to you unless there are very specific circumstances that warrant this assumption being rebutted.

If we socialise care then it should operate broadly in the same way we socialise car accidents and house damage. You pay a premium and this buys you coverage. You don't think say to the millionaire that has an accident in their insured car that them claiming on their insurance is an opportunity for them to squirrel away money. That would obviously be insane. Why imply this when it comes to care?

Don't be silly - it is nothing to do with care, you will pay 10% on inheritance, then you pay for your own care! Did you really think these 10% will pay for everyone's care?

I think you're correct, it will be like the current model in Scotland where personal care and support is paid for by the local authority. Don't have the exact figure but it worked out to the council covering around 15% of the £1200 p/w care home fees. MIL then paid around £1000 per week for accommodation costs.

Those nurses/public sector workers don't get to pass their pensions on

Funniest thing I have read all day.😂

Yes, because being in an unfunded public sector pension scheme is clearly the thin end of the wedge for nurses.🙄

I think this is a fair proposal too. It is not fair that some people see their whole estate go on care home fees. 10% on all estates makes sense. Presumably this would be instead of inheritance tax or would it be as well as? I would also be worried the very rich would find loopholes though.