Funding free personal care for older people

September 6, 2018

Independent Age is calling for free personal care for older people in England to help solve the social care crisis. Polling, carried out by YouGov for Independent Age, found that the majority of adults in England would support paying more in tax or a lump sum to fund free personal care.

The charity is now urging the Government to introduce a social care contribution aligned to a commitment to provide free personal care in its report, A Taxing Question. It suggests that this will make it easier for people to navigate the system, as well as reducing NHS spending, reducing delayed transfers of care, and allowing more people to live at home independently for longer. It also suggests that free personal care for older people would mean no-one would have to sell their home to pay for care.

Independent Age also says that the cost of introducing free personal care is only slightly more than the Government’s proposals to deliver social care reforms.

Over 2,000 working age adults were polled from a Britain-wide sample. The poll found that:

  • Almost three-quarters (74%) of adults support free personal care for everyone who needs it.
  • More than two-thirds of adults (69%) would be happy to pay more tax to provide free personal care for all.
  • 27% would be willing to pay a small increase in Income Tax.
  • 25% of adults would be willing to pay a small increase in National Insurance.
  • 11% would support a new small tax for people aged between 40 and retirement age.
  • 6% would prefer paying a lump sum of £30,000 on retirement.

This support was found to be consistent across political leanings, gender, age and region.

Independent Age has released a new report, A Taxing Question: How to pay for free personal care, produced in conjunction with Grant Thornton UK LLP and The Social Market Foundation, which looks at various funding options for social care, including what they would cost the individual and what the funding situation might look like in 10 years’ time.

Looking at increasing all rates of Income Tax as an example, this would:

  • Generate an extra £6.14 billion in 2020/21 if raised by just 1%
  • Be able to provide free personal care for all in 2020/21 if raised by 1.09%
  • Be able to provide free personal care for all in 2030/31 if raised by 2.11%
  • Cost an individual earning the national average annual salary of £26,832 around an extra £12.47 a month if their Income Tax contribution was increased by 1%, which would equate to approximately £7,033 over 47 years (assuming their salary remained the same from 18 to 65).

However, according to the report, no single funding option delivers the level of reform that the public wants and older people need in 10 years’ time. Some funding options, including increasing business rates or Corporation Tax, increasing Council Tax or Inheritance Tax, or charging National Insurance for over-65s, fall short of addressing the social care funding gap.

The report looks at how the proposed funding mechanisms would achieve both the Government’s proposed 'cap and floor' model and free personal care, concluding that the difference between the costs would be around £1bn in 2020/21, rising to £2bn in 2030/31, but that free personal care for older people would result in significant benefits.

Janet Morrison, Chief Executive of Independent Age says, 'Many older people are being let down by a social care system in crisis that is failing to meet their needs. Giving older people the right to free personal care would change that. Not only is it what people want, but they are also willing to pay a bit more tax to get it. It is simple and costs a similar amount to the government’s preferred proposals. However, the government also needs to ensure people are getting the support they need, or the public will not tolerate contributing more in tax or other means to pay for social care.

'In addition, free personal care would significantly reduce the number of older people marooned in hospital due to lack of available personal care, support the joining-up of health and social care support and ultimately enable many more older people to live independently and stay in their own homes for longer.'

Alex Khaldi, Partner and Head of Social Care Insights, Grant Thornton UK LLP comments, 'With public sector finances edging ever closer to a tipping point, this report marks an important contribution to the ongoing debate around the future of social care funding. Presenting the financial output of each funding option, along with the tax implications, provides a detailed picture of what should be seriously considered going forward.'

Responding to polling, Glen Garrod, President of the Association of Directors of Adult Social Services (ADASS), said, 'We have a good legislative base in the form of the Care Act but we lack the funding to deliver it. This report comes at a time when the future of social care in England and how it is funded is being considered.

'This is a significant national and yet highly personal matter that transcends political, social and economic considerations. No government has found a sustainable, long-term solution though many previous attempts have been made.

'The question isn't just a technical one that seeks to find a suitable funding mechanism – as challenging as that is in its own right. It is also about what kind of adult social care we want to see and in consequence how much money will be needed to fund that model.

'This report offers a good insight into these two critical questions and arrives in a timely fashion. For anyone interested in the future of adult social care in England it constitutes recommended reading from my point of view.'

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