The Institute of Fiscal Studies has delivered a fairly scathing analysis of the Budget and have cast doubts on the sums. There was an unexpected shock for pensioners who will see a freeze of the cash value of their tax allowance until it aligns with the personal allowance for the working age population – the so called ‘granny tax’.
Rather than being announced in the Budget speech, this was presented as an aside and a note from HMRC that detailed the implications for pensioners. The note says that in 2013-14, 4.41 million people will be worse off in real terms with an average loss of £83. Within the total, 360,000 individuals aged 65 will lose an average of £285, reflecting the changes in entitlement to age related allowances. It also means 230,000 people will be brought into income tax.
It is an unpalatable but imperative reality that we all have to pay more in the coming years, and those older people who can afford it must also be prepared to contribute.
However, it seems extraordinary that this budget offered a tax break of at least £10 000 to the very wealthy while penalising many pensioners on fairly modest incomes, who are already being squeezed by perpetually low interest rates and inflation that has been running well above the Government’s 2% target. Continue reading “Missed opportunity to address social care funding”
This guest blog was contributed by Richard Humphries, Senior Fellow at The King’s Fund. Richard joined The King’s Fund in March 2009 to lead on social care. His professional background is social work, having worked in a variety of roles including Director of Social Services and Health Authority Chief Executive (the first combined post in England).
Age UK’s new report – Care in Crisis 2012– is the latest clarion call to sort out a care system which even Government ministers accept is broken. The report sets
out in stark detail just how many people are going without the care they need. Public spending on care for older people is actually going down even though numbers are going up – especially frail very old people who need the most care. England is no different from all advanced countries in the world that need to devote a bigger share of the national wealth to an ageing population – itself a sign of social and economic success. Yet we are finding it remarkably difficult to rise to the challenge.
Here are four things you may not know about England’s social care system. It has its origins in the 1948 National Assistance Act when the world was a different place, with much lower standards of living, health and wealth. 64 years on, the care system must be the only public service that has never been fundamentally reformed to keep up with changing times (although it has been frequently reorganized, which is not the same thing). We wouldn’t dream of running any other major service as though we were still in the 1940s. The system has suffered from years of policy tinkering instead of sensible long term reform.
Second, if you have savings or assets of more than £23,250, you will be entirely responsible for the full cost of residential care, a cliff-edge so steep it makes Beachy Head look like a gentle slope. Many people do not realize this until it is too late. Some think , wrongly, that the NHS will pick up the bill.
Third, that even if you are relatively poor, it is unlikely that your local authority will help you. 82% of councils limit the help they provide to those with ‘substantial’ or ‘critical’ needs i.e. you will need to have become very dependent indeed before you can get help. England must be unique in simultaneously restricting help to those with the highest needs and the lowest means.
And finally, that your chance of needing care and support in later life is much higher than you think – one third of men and a half of all women will have a significant care need at some point in their retirement. So we all have a stake in seeing a better system fit for the 21st century.
The King’s Fund has been arguing the case for change, alongside many other charities, since our major review by Sir Derek Wanless in 2006. Since then White Papers and Green Papers have passed like ships in the night. The Government pledged to set up an independent commission to look at how care is funded. It delivered on that commitment and the commission headed by eminent economist Andrew Dilnot has produced proposals that command almost universal support from organisations involved in older people’s care. We agree that they offer a sensible framework in which the costs of care can be met. But reform of funding must go hand in hand with reform of how care is delivered.
The Age UK report sets out seven major building blocks for change including quality, safety and dignity in care. The Government will soon set out its stall in a White Paper and accompanying response to the Dilnot report – its authors could do worse than make sure Care in Crisis 2012 is top of their preparatory reading list.