Budget 2012: Elderly care bills could rise to £100,000

George Osborne hinted in the Budget that the “burden” of funding services for Britain’s ageing population should not fall on younger generations.

He promised a White Paper detailing a new system for looking after elderly and disabled adults in care homes and through home-help services, which charities and health experts say needs urgent reform.

Last year a government adviser, Andrew Dilnot, proposed a new system of funding for elderly care, intended to ensure that pensioners are no longer forced to sell their homes to cover the cost of care in old age.

Under his plan, no-one would pay more than £35,000 during their lifetime for their personal care.

Any costs above this level would be met by the state in an effort to stop thousands of pensioners being forced to sell their homes each year.

The costs of food and accommodation in a care home would not be covered by the cap.

However, the Treasury is said to be reluctant to provide the £1.7 billion a year in extra funding that the Dilnot plan would require. Some officials are believed to favour a scheme which would see all but the poorest pensioners pay the full cost of their care.

The Department of Health has modelled a plan under which the cap could be set at £100,000, almost three times the level Mr Dilnot proposed, the Telegraph has learned.

A spokesman for the Department declined to comment on the details of the plan, saying only: “We are considering a range of options.”

But Mr Dilnot appeared to signal his opposition to such a move when giving evidence to MPs on the Health Select committee last December. “If the cap got up to £100,000, that would not do the job,” he said.

In his report, published last July, Mr Dilnot suggested one option could be a new tax on elderly people, arguing that it would be seen as fairer for the people who would benefit from the new cap on care costs to help pay for it themselves.

In the Budget, the Chancellor hinted that paying for old age should not fall to younger generations.

“We will also address the rising costs of an ageing population, and the burden this places on future generations,” he said.

Imelda Redmond, head of policy at Marie Curie, who advised the government on care reforms, said a cap at £100,000 would be much less likely to help pensioners and disabled plan for their old age.

“People just don’t expect to pay that much,” she said.

Chris Horlick, from the specialist insurers Partnership, said the level of the cap was a “key factor” but warned that many people would continue to face expensive bills for accommodation and food, even if their care costs were paid by the state.

Cross party talks are under way in an attempt to forge a consensus between Labour and the coalition on how to fund social care for elderly and disabled adults in future.

However, the plans have stalled as the talks struggle to reach agreement. The White Paper was originally intended to be published next month, but now looks unlikely to appear before June.

Sourced from The Telegraph, 23rd March 2012.