Image by Duncan Brown (Cradlehall) via Flickr
It seems that the new Care Act is starting to unravel under the weight of its complexity.
The Act arose from the Dilnot Report, published in 2011, into care of the elderly. The new Act is amazingly complex, with a dog’s dinner of unrelated issues tacked onto it like Safeguarding (sic) and quality inspection of care homes.
However, the core proposals in the Act are these.
At the moment, if an elderly person goes into a care home, and their assets exceed £23,250, they have to pay the care home bill. That £23,250 includes the value of their house (provided their spouse is not still living in it).
Thus under the current system, many people are forced to sell their houses to pay for their old people’s home.
Proposed New System
First of all, there will be a cap of £72,000 on what people have to pay for care in their lifetime. So once they have paid that much, the State will pay their care home costs beyond that.
Secondly, there will be a deferred payment scheme. Provided their assets excluding their house do not exceed £23,250, they will be able to defer any payment towards their care home costs until their death. Thus their house will not have to be sold until then.
Third, the asset limit is being increased so that some people with modest assets will be taken out of having to pay altogether.
The Act is (much) more complicated than this, but this is a rough summary as best I can provide it.
There are some theoretical objections to the Act – which I aired in a previous post on the Dilnot Report.
There are more urgent objections though, and they surround implementation of the Act.
The Government is currently going out to consultation with local authorities and others on how the Act should be implemented. They did not think the implementation of these complicated proposals through, until the Act had been passed. That is an example of bad government that will come back to haunt them.
With this Act, the devil is very much in the detail.
For example, what costs will count towards the cap? The whole of a person’s care home bill, or just a part of it? What will be included and what will not? How will that be policed? Will individual Local Authorities make up their own rules, or will there be national ones?
How much intrusion by the State into a person’s financial affairs will be needed to work out how much they have paid, what their assets are, and so on?
Who will pay for the administration involved? The Act says that Local Authorities will be able to pass these costs on to the people involved. How much will they be allowed to charge?
What about people who move from one local authority area to another? The Act says that their “care account” – the amount they have already spent towards the cap and their deferred payments – will move with them. So local authorities will need to transfer these records from one to another. And a person’s estate might end up owing deferred payments to more than one local authority.
Crucially, who will pay for the new schemes? Since it is almost impossible to estimate the ongoing cost of them, there is enormous scope for debate between Government and Local Authorities about the right amount for the Government to pay.
There are many other miscellaneous provisions in the Act as well – far too many to list here. The size and complexity of the Act means that its provisions will be debated and argued over for many years to come.
Most of all, our Government is teetering on the brink financially, and implementing an austerity programme, and here they are extending the scope of the welfare state significantly.
The sheer complexity of the Act means that it is possible for the Government’s opponents to mislead people about the proposals. That Telegraph article I linked to above is headlined Betrayal of elderly on social care costs – Thousands could be forced to sell homes despite earlier Government assurances. It discusses comments made by a Labour Peer, Lord Lipsey:
There is now a huge restriction which will mean that very few people will take advantage of the deferred payment scheme. You are only eligible for a deferred payment loan if your other assets in total come to less than £23,250.
Remember, that £23,250 excludes the value of your home. Therefore to claim that people may after all be forced to sell up straight away are disingenuous. (Perhaps Lord Lipsey has a lot more than £23,250 in the bank – he talks quaintly about people having to forego their daily copy of the Racing Post if they have less. Most people don’t have that much of course.) The Act’s complexity, and therefore the fact that most politicians, journalists and members of the public don’t understand it, enable people to make mischief at the Government’s expense.
I am fundamentally against the whole thrust of this Act. It robs long-suffering taxpayers to subsidise the elderly rich. It continues the long line of extensions to the welfare state by both Conservative and Labour Governments, when in fact it needs to be scaled back, not extended. And Labour’s complaint is that it does not go far enough!
But in the implementation of these proposals, the Government have shot themselves in the foot – or even in both feet. They have produced a grossly complicated bill that will be completely unworkable in practice. This will come back to haunt the next Government – of whichever party it is – in around 2016 onwards. It will be a fiasco to rival the Tories’ Poll Tax and Gordon Brown’s Tax Credits scheme.