"Scandal" of people selling homes to fund cost of care must end, says Hunt

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With up to 40,000 people each year forced to sell their homes to fund "unlimited" costs of care, the Department of Health has commended a new "fully-funded solution".

Care Home Fees

The government will shortly announce a plan to cap social care costs and the amount elderly people have to pay in England at £75,000.

There will also be an increase from £23,250 to £123,000 in the value of assets people own before being required to contribute to basic nursing care costs.

The health secretary, Jeremy Hunt, said while the new proposals for change would be "profound", it was essential to provide help to people who were faced with losing their homes.

Some 50% of all people turning 65 will soon need to pay up to £20,000 towards their basic nursing care, such as helping to dress, wash, shop, prepare food, etc. For 1-in-10, the expected figure will exceed £100,000.

Although ministers say the amount people will have to pay in their lifetimes will be capped at £75,000, this will cover only nursing care. Accommodation and food – some £7,000-£10,000 annually – will still need to be paid, and is expected be capped at £12,500 a year under Mr Hunt's plan.

Support for people above the £75,000 cap is expected by 2019 at the earliest, assuming the proposals are approved. The government wants to encourage people to make early provision for care needs in the same way as they arrange pensions, with the hope that insurers will create appropriate new types of policy.

Mr Hunt said that capping how much people have to pay "makes it possible for insurance companies to offer policies, for people to have options on their pensions, so that anything you have to pay under the cap is covered".

The government might also increase the means-tested threshold which ensures state help towards care costs for the less well-off. At present, those whose assets exceeding £23,250 have to pay for their care.

For people needing to go into a care home, the threshold will probably increase to £123,000: a measure of how rising property prices have squeezed many home-owners out of the state system.

The plans, which could cost annually around £1bn, are likely to be part-funded by freezing the inheritance tax threshold, at £325,000 for individuals and £650,000 for couples, for 3 years from 2015.

This contrasts with the Chancellor's Autumn Statement promise to raise both thresholds by 1% before 2016. National Insurance and pensions changes already announced will cover other funding.

The government's proposals are "not perfect", according to Andrew Dilnot, whose 2011 report recommended a basic care cap of between £25,000 and £50,000. However, the economist said the present regime was a "complete disaster" and hoped the new framework would "radically reduce" concerns about how people would cope as they got older.

"The cap is higher than I would have wanted," Mr Dilnot said. "But I recognise that the public finances are in a particularly tricky state."

He added that funding social care from general taxation was "not plausible" and that the new proposals would ensure "nobody is uninsured if they turn out to be very unfortunate".

Although Labour said the proposals were a "small step forward", immediate action was necessary since the changes would not be felt for many years.

Noting that the initiatives will make little difference to thousands of older and disabled people, shadow minister for care and older people Liz Kendall said: "We need a far bigger and bolder response to meet the needs of our ageing population; a genuinely integrated NHS and social care system which helps older people stay healthy and living independently in their own homes for as long as possible."

The general secretary of the National Pensioners' Convention, Dot Gibson, said that a £75,000 cap "will help just 10% of those needing care, whilst the majority will be left to struggle on with a third-rate service".

"The current system is dogged by means-testing, a postcode lottery of charges, a rationing of services and poor standards and nothing in the plan looks like it will address any of these concerns," Ms Gibson said.

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