I’ve not had a chance to read the report in any particular detail yet, but one of the most widely talked-about features (since significantly before the report was published: this article in the Telegraph was over a week ago) has been the proposal that individuals’ liability to pay for their own long-term care should be capped at £35k. The first of the main recommendations is that
[t]o 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 £50,000. We think that £35,000 is an appropriate and fair figure and have used this example throughout our report. Where an individual’s care costs exceed the cap, they would be eligible for full support from the state. This change should bring greater peace of mind and reduce anxiety, for both individuals and carers.
The second recommendation recognises that
[n]ot everyone will be able to afford to make their personal contribution, and those currently just outside the eligibility for means-tested help are not adequately 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 £23,250 to £100,000.
But there’s something that confuses me.I’ll take it as a given that a decent society looks after the needy, and that people should, to the greatest extent possible, be shielded from the effects of misfortune when it comes to their care needs. That care is publicly provided is a good thing. However, this provision has to be just: the members of the public expected to fund it cannot be expected to carry too large a burden. To this extent, some degree of means testing seems to be in order except in some circumstances. (One of the exceptions is alluded to in the third proposal, which is that
[p]eople born with a care and support need or who develop one in early life cannot be expected to have planned in the same way as older people. 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 subjected to a means test.)
What puzzles me is how points 1 and 2 sit together. The point of a means test is to ensure that the poorest have to pay as little as possible, while people who can afford a bigger contribution are expected to pay more. But then, why should it be that people’re expected to pay the first £35k of their own care costs? What’s strange is that it means, in effect, that someone with assets of £135k stands to be left, at the end of their period of care (which is likely to be the end of their life) with £100k in their estate – a loss of 26%. This is not unjust in itself. But it is strange that someone with assets of, say, £1,o35,ooo but identical care needs will leave an estate worth £1m – which is a loss of only a little under 3.5%.
And that’s what I really don’t understand: why is it that it’s the first £35k above the cut-off that counts? Why nothing after that? Doesn’t this simply mean that the wealthier you are, the smaller the portion of your assets get used up by the cost of care? Isn’t that (a) slightly perplexing, and (b) at odds with at least the spirit of the means-testing point? The poorest will be protected – but only because they would leave estates worth next-to-nothing anyway – as will the wealthiest; those in the middle, though, seem to get whacked.
The report explains that
[u]nder the current system someone who has lifetime care costs of £150,000 could lose up to 90% of their accumulated wealth. The combination of the capped cost model (with the cap set at £35,000) and the extended means test would ensure that no one going into residential care would have to spend more than 30% of their assets on their care costs.
This is really rather strange. If it’s need that makes the difference when it comes to making benefit calculations, the percentage of the estate that’s gobbled up oughtn’t to matter – except to the people who stand to inherit from that estate. (There is, of course, no reason to think that it’d be impossible for the State to reclaim assets after death, so even if 100% of a person’s estate went to pay their care bills, it wouldn’t follow that they’d be left destitute while they’re still alive.)
On the assumption that the needy ought to, and will, get at the very least the care they need from a decent society whatever system is adopted to pay for it (and we might hope they’d get more than is described by bare need…), the people who seem to benefit most from the £35k cap is the children of the wealthiest of those in care, since they’ll have their inheritance – something they get by the mere good fortune of having chosen their parents well – protected.
That seems to be rather more weird than it is just. It’s nice if you can inherit something from your parents, but it’s not obvious to me that it’s a right; you haven’t obviously been wronged if their assets were required to pay for their care. They might plausibly have been wronged if they were left destitute by that payment, but – as I’ve noted – that could straightforwardly be avoided. Even if you think that there’s somehow a right to inherit, quite why a maximum level of inheritance can’t be stipulated (either as a a percentage of the estate, or in absolute terms), and the rest socialised, escapes me. It looks rather as though the desire to protect the assets of the wealthy means that the cost of looking after them is effectively being farmed out to the public sector, so that their children don’t have to lose anything from their potential inheritance. And this means that the poorest will be guaranteeing the legacies of the wealthiest.
I’m sure that the report can’t be as regressive as it looks – that it can’t institutionalise the ability to keep hold of, and pass on, a bigger proportion of your assets the wealthier you are: that’d be nuts. But (at least from the diagram on p 21), that’s what it looks like; and I can’t see where it explains how this wouldn’t happen.
So I’m asking this in earnest (which is why I’ve tagged this post as politics, not a rant): What’ve I missed?