“The Report of the Commission on Funding of Care and Support” was published last week. Although this report looks at the situation in England, and was commissioned by the UK coalition Government, the issues raised and the recommendations made are of direct relevance to us here in Scotland.
Extracts from the four key findings:
- The current adult care funding system in England is not fit for purpose and needs urgent and lasting reform.
- The current system is confusing, unfair and unsustainable. People are unable to plan ahead to meet their future care needs. Eligibility varies depending on where you live.
- A major problem is that people are unable to protect themselves against very high care costs. The current availability and choice of financial products to support people in meeting care costs is very limited.
- Most people are realistic about the need for individuals to make some contribution to the costs of care in later life, but they want a fairer way of sharing costs and responsibility between the state and individuals.
Extracts from some of the main recommendations:
- To protect people from extreme care costs we recommend capping the lifetime contribution to adult social care costs that any individual needs to make at between £25,000 and £35,000. We think £35,000 is an appropriate and fair figure.
- Not everyone will be able to afford to make their personal contribution, and those currently just outside the scope of eligibility for means-tested support are not currently protected. To address this, means-tested support should continue for those of lower means, and the asset threshold for those in residential care beyond which no means-tested help is given should increase from £23,500 to £100,000.
- Those who enter adulthood already having a care and support need should immediately be eligible for free state support to meet their care needs, rather than being subject to a means test.
- Universal disability benefits for people of all ages should continue as now.
- People should contribute a standard amount to cover their general living costs, such as food and accommodation, in residential care. We believe a figure in the range of £7,000 to £10,000 a year is appropriate. [1]
- In reforming the funding of social care, the UK Government should review the scope for improving the integration of adult social care with other services in the wider care and support system. In particular, we believe it is important that there is improved integration of health and social care. [2]
Estimated cost
The estimated cost of these proposals is £1.7bn per year rising to £3.6bn by 2025.
Two examples from the Report may help explain how this would work in practice.
Example 1:
Alice lived alone in her own home worth £180,000. She had dementia and needed to go into a residential care home when she was 83 for the last 5 years of her life.
Under the current system
Alice’s daughter needed to arrange for Alice’s home to be sold in order to be able to use the money to pay for Alice’s care. Alice had to pay for all her care and living costs in full until she died, spending £165,000 from her pension income and housing wealth.
Under Dilnot
Alice would initially need to contribute in full to her care and general living costs. After two years she would have contributed £35,000 towards her care and reached the cap. From then on, the state would pay Alice’s annual care costs of £18,500. Alice’s general living costs would be paid out of her pension income. Alice would be able to keep 80% of her wealth.
Example 2:
John has a stroke at the age of 85. He could no longer manage at home and entered a care home costing £28,500 a year. He lived in the care home for four years before he died. Prior to this, he lived on his own, in a house which he owned outright and was worth £140,000. He had £220 a week from his own pension and the state pension.
Under the current system
John had to contribute all his income except for £22.60 a week and use his housing assets to pay for his care. He continued to pay for his care in full until he died, spending £74,000 from the value of his home.
Under Dilnot
John would pay the first £35,000 of his care costs and after two years he would reach the cap and then receive all his care without charge. He would continue to contribute £10,000 a year towards his general living costs. This would be done through his pension income.
John could choose to use his housing assets to pay for the £35,000 (taking out a deferred payment from the local authority), and still have £105,000 left, three-quarters of his wealth.
Reaction to this report in England
UK Government Ministers responded cautiously. The health secretary, Andrew Lansley, described the Dilnot report as “an immensely valuable contribution” but warned that the UK Government needed to “consider carefully” the “significant costs” of reform.
Age UK welcomed the proposals. [3] Michelle Mitchell, Charity Director at Age UK, said: “Age UK welcomes the Dilnot Commission recommendations, which set out a clear blueprint for the long term sustainable reform of social care.
The Guardian said: “Life is littered with potential financial catastrophes, from costly-to-treat illnesses to house fires, but in most cases the risks are pooled, whether through the state or the insurance market. When it comes to care those with more than £23,500 are on their own, facing potentially unlimited liabilities. The results are dire. One in five retirees will clock up costs of more than £100,000. Some 20,000 people are forced to sell their homes every year. So Dilnot’s plan is very welcome as a way of staving off ruin for an unlucky minority.”
The Daily Mail took a different view: “The £35,000 doesn’t cover charges for bed and board; those could reach £10,000 per year. And anyone wanting more than bog standard levels of care will pay extra. So the middle classes will still face massive costs – while those on benefits will pay nothing.”
Conclusion
This is a good and more importantly a timely report that points to the questions that we in Scotland also need to ask and answer.
In my next article I will look at latest thinking on this issue in Scotland and in particular what our main political parties said prior to the recent Scottish General Election.
James Aitken
Legal Knowledge Scotland
[1] The fact that these costs are also means-tested in Scotland is often overlooked by some commentators in other parts of the UK.
[2] The recently published report by the “Christie Commission” which looked at the future of public services in Scotland has made a similar recommendation.
[3] It is not clear why this part of the organisation is called “Age UK” and not “Age England” as it is effectively the English umbrella group as distinct from “Age Scotland”, “Age Cymru” and “Age NI”.
