Annabel Denham

The confusion at the heart of social care

Two issues are being almost willfully muddled

Boris Johnson’s majority plunged to just 26 last night, following a rebellion over controversial changes to social care plans. Means-tested, state-funded payments will no longer count towards the £86,000 limit on the amount people will have to pay for their care. Those with initial assets worth less than £186,000, and who have received such help, could be worse off as a consequence. Critics have pointed out that this is likely to disproportionately affect residents in the North or the Midlands because of differential house prices.

Johnson’s government isn’t the first to tie itself in knots over the issue of social care funding. Successive administrations have failed to bring about reform over the past 25 years, with most proposals swiftly abandoned.

And while governments procrastinated, the fuse on our demographic time bomb has shortened. The Office for Budget Responsibility projects spending on social care will increase by about 0.8 per cent as a share of national income over the coming few decades because of population ageing. Political pressures have already led, and will continue to lead, to even greater increases in spending.

We should not be taking money from average taxpayers, many of whom are not homeowners, to assist those living in houses worth millions

The Tories’ plan is based loosely on the Dilnot proposals from 2011 — which suggested a more generous means-testing threshold and a cap on care costs — but it includes a ratcheting up of national insurance rates to foot the bill, and then a permanent new levy which further complicates our crazy tax system. The manifesto-busting hike was presented as a long-term fix — but it means the tax burden for working-age people will increase to prevent wealthy pensioners from needing to sell their homes to pay for care.

But here’s the major flaw with the current social care debate: funding for the elderly falls into two distinct subsets, which are almost deliberately mixed up.

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