My solution for care funding

[Kendodd]

It seems unfair to me that the cost of this are to be loaded on the young. I'm old btw

My solution, that I believe to be fairest would be a 2% inheritance tax that everyone who dies over retirement age pays. This is separate to the inheritance tax we already pay and could be owed against a house while a spouse remains living in it. Care is funded from this with residents of care homes only paying a food bill. The 2% is paid whether you needed care or not.

If you don't like my solution, please suggest a better one, don't just criticise.

I should have posted in AIBU to enable voting. Although I'm sure I'd get loads of 'dont like it' votes from people with no better solution.

And for information, only about 5% of estates pay any inheritance tax at the moment and the average age to receive an inheritance in the UK is 61.

I don’t have an issue with people selling their homes to pay for care. You need the service, you pay for it. It would be very unfair for us to care for our parents in their home, then they die and we have to pay 2% of our inheritance for a service we never used.

I don't have an issue with people selling homes to fund care particularly either, it does seem a much hated solution though. 2% would be a sort of insurance after the fact, everyone pays in, only some will need. As for why should I pay for something I didn't use, I could say that about loads of publicity funded services that I'll never need, I'm absolutely happy to pay for them for those who do though.

How would the financial incentive work?

Don't be an arse.

This has to be a joke 😂

My objection is that everyone would pay in order for the rich to be able to leave their houses to their children. So someone who could never afford a house will have to pay 2% of their meagre estate, in order for Richy Rich to inherit Daddy’s house instead of it being sold to pay for care.

I totally agree with funding public services for everyone to use. But I don’t agree with funding a scheme that allows the rich to protect their inheritances.

OP - I don't get it. How does someone who is dead pay inheritance tax? Can you explain a bit more clearly for the slightly dim amongst us.

As someone who is nearing 60 (no I don't want a financial incentive to be euthanised thankyouverymuch, I'm still working and supporting my children and a fully functioning member of society enjoying life) with a parent who is paying for some care and will no doubt need to pay for more if she lives much longer, I am interested in theories around this health care cost.

A percentage of the money the government saves (not paying out for pensions & health/social care) goes into your estate.

Describe it as a death tax then.
When you die 2% of your estate goes to a public care fund.

On a tangent, I'd reform inheritance tax as well. I would just treat it as income for the recipient and tax it as if it was earned income. I don't see why we should be taxed highly on money we work really hard to earn and have to spend carefully to live on but can receive hundreds of thousands of pounds that we did absolutely nothing for and not pay a penny in tax

Jeez @Tania64 I'm 60 and still have a kid in school!
If you offered a financial incentive don't you think some people who were in desperate financial straits would use it?
There is not enough from inheritance tax to pay for the care needed anyway.

"On a tangent, I'd reform inheritance tax as well. I would just treat it as income for the recipient and tax it as if it was earned income. I don't see why we should be taxed highly on money we work really hard to earn and have to spend carefully to live on but can receive hundreds of thousands of pounds that we did absolutely nothing for and not pay a penny in tax"

But that inheritance has probably already been taxed at least once, so it's not paying not a penny in tax at all.

Tbh I don't think this would work, what would happen if someone had no liquid assets just a house that passed to DC, would they be forced to sell to pay the 2%?

Care definitely needs more funding, whether from a separate tax / higher proportion of NI etc but I'm not sure how it would work well with an ageing population at the moment, we're getting a bit top heavy!

We need taxes to be higher from other areas instead of income. I agree too much burden on the young.

major fiscal issues are coming with the ageing population

What if you haven't got any money but still need care?

I think it’s a fair enough idea actually. The only fair thing is if we all pay towards it and something is going to have to change as social care is in crisis. Where are you getting 2 % from though? Is that plucked out the air or based on something?

I think that’s the point. It would be universal

Then you get care.

The maths doesn’t work. Say 25% people need care (a laughably low estimate with our ageing population). Say the average length of need is a year before they die and the cost £1000 per week (again, both low estimates). That means 25% people need £52k, so £13k pp. £13k is 2% of £650k so we’d need the average death estate to be £650k. According to Google the average death estate is actually £69k, about a tenth of what is needed. So your 2% would have to be 20% with no exceptions, on top of current taxes.

Partially plucked out of the air.
This was a LibDems idea, they suggested between 1% and 3%, I assume they did the maths.

I've been googling myself and couldn't actually find an average death estate figure. I did see the 69k figure, but this was the amount in cash left, not including property.

Fair point. I still think it wouldn’t add up, especially once you take into account the cost of administering it.

But that inheritance has probably already been taxed at least once, so it's not paying not a penny in tax at all.

Well a few points with this.
The person receiving it wouldn't have already paid tax on it.
Likely loads of it would have come from house price inflation and not had any tax paid on it.
We are taxed twice loads. I pay council tax out of money already reduced by income tax, likewise VAT, road tax etc.