Member News
29th May 2012A new report on the costs of social care has suggested an end to universal benefit payments to older people with higher incomes and wealth.
The Nuffield Trust study on how to fund the social care system, which includes the Dilnot proposals, says there are various options, including taxes on wealtier older people.
Michelle Mitchell, charity director general of Age UK said, the report is "well-timed" and "a useful asset in opening up an honest debate about how the government and individuals need to plan for a new sustainable system of paying for social care".
The government has said it will publish a White Paper on Social Care and a Progress Funding Report.
Ms Mitchell said all political parties must have the "courage and conviction" to address the reform and funding of social care.
The Nuffield Trust report said the winter fuel payment, free TV licenses and bus passes could be restricted and the money diverted to pay for social care.
However, it warned that arguments in favour of such a proposal would need to balance the financial benefits (up to £1.4 billion a year) against the costs in terms of fairness and the impact on social solidarity.
The report also said that while raising revenue from older people rather than the general population may seem counter-intuitive, average disposable household income for those below retirement age in 2009/10 was around £30,000 whereas for the retired, the equivalent amount is a third lower at almost £20,000.
The effective rate of taxation for older people is lower, on average, than for working age people of a similar income. This is in part the result of national insurance being payable only below retirement age.
"It is imperative that the government's planned White Paper addresses the underlying funding gap," said Nuffield Trust chief economist Anita Charlesworth.
"Failure to address social care funding will put vulnerable older people at risk and increase pressure on the NHS.
Potential solutions identified in the paper include: minimising the cost of the Dilnot recommendations by opting for a higher level of caps; generating more productivity from existing social care services; and exploring options for redirecting elements of the health and welfare budgets into social care.