Free care for the elderly? There´s got to be a better way
The National Care Service White Paper
It has taken me a little while to dissect the latest government white paper on funding care launched by Andy Burnham on 30th March. Now that election campaigning has begun the prospects of some of this ever seeing the light of day may appear slim.
The key pledge is that residents in care homes will receive free care after two years in residential care. This is what the white paper contains on page 131.
Free care for those in residential care for more than two years
In the second stage of reform, we will build on the Personal Care at Home Bill, and introduce a new commitment that anyone staying in residential care for more than two years will receive free care after the second year. This commitment will be introduced from 2014, and will apply to those already in residential care as well as those who may go into residential care in the future.
We want to ensure that people who need care and support are able to stay in their homes and communities for as long as they wish to do so. However, we know that some people will prefer, or may need, to enter residential care - for example, if they are living on their own or their care needs are increasing. The costs of care in a residential setting can be very high. We estimate that, on average, people currently pay around £12,000 per year for their care costs in residential care.7 Around 5 per cent of all those who enter residential care will stay for over 10 years,8 and this could cost them over £120,000 in care costs alone.
In the current system, people in residential care often need to spend down their savings and the value of their home, to the last £23,000, before they receive any support from the state. We think that it is unfair that people can face such catastrophic care costs, without any help from the state. Therefore, in the second stage, anyone staying in residential care will receive free care after the second year.
Local authorities will assess people's needs, and will provide support on the basis of what they would reasonably expect to pay for someone with those needs. If people have chosen to enter a care home where the costs of care are higher than this assessed amount, people may need to make up the difference. People on low incomes will continue to have all their residential care costs paid for them by the state.
Together with the Personal Care at Home Bill, this commitment will mean that the most vulnerable in society, those with the highest needs, are protected from very high care costs, wherever they may need care.
Around 60,000 people, who previously would have faced very high residential care costs on their own, will now benefit from state support for their care costs. This will be a significant step towards a comprehensive National Care Service.
People will ‘benefit from state support for their care costs'; the state is NOT going to pick up the full cost of care. So what is the state going to pay?
The White Paper makes a clear distinction between ‘care costs' and ‘accommodation costs'. Care costs will be paid for up to the level that the local authority ‘would reasonably expect to pay for someone with those needs'.
Currently those with less than £23,250 find that a local authority's opinion on what they might reasonably expect to pay for care bears little relation to what most care homes charge.
Disappointing
Deferred Payments Scheme
Interestingly, the government recognise this and has committed to make the deferred payments scheme an entitlement. This scheme offers an interest free loan to meet care costs secured against a property.
The scheme means that no-one need sell their home to fund care, although, realistically at some point the home will need to be sold.
People who opt for the scheme may find the property value being entirely used up in the event of longevity. If the property were sold, products such as care plans could protect some of the estate.
Is there a better way?
I am puzzled by these proposals, particularly as they come from a Labour government.
Wealthy people will be able to fund their care privately for two years and will be grateful for the protection of their assets that this scheme gives, as will their beneficiaries.
Those with limited means will find their estates decimated by meeting the cost of care for two years.
Currently people in the worst situation are those with between around £30,000 and £130,000. They get little or no help from the local authority in finding care, and no guarantee that the local authority will pay for their care in their chosen home when the money runs out (which in most cases it will - although we can often improve the situation).
They spend their two or three privately funded years worrying about whether they will have to move when their funds expire.
These are the people who taxpayers money should be used to help.
Simon the Care Home Marketing Guy
Added 30-Jul-2010 19:31
Very insightful blog, I can't believe I'm the first person that I have seen to leave a comment here.
Agree completely with what your saying, it is extremely misleading when the government says 'free care for all' in a perfect world that would be the case but unfortunately this is reality and in reality that is never going to happen really.
Those who really need the care, who worry about the costs, are usually always going to struggle.