Andrew Dilnot’s report on social care has been warmly received,
Puma II Shoes, including by progressive voices. But there’s something about the report that troubles me. And that’s the assumption underpinning Dilnot’s work that it is unfair to ask an individual who has tens of thousands of pounds of assets tied up in housing to liquidate those assets in order to pay for their social care in old age.
Dilnot says that one of the main benefits of the reforms he proposes is that “no one going into residential care would have to spend more than 30% of their assets on their care costs”.
This table (via the BBC) shows the effect of his proposed reforms.
And two of the case studies show that allowing individuals to keep hold of the bulk of their housing wealth is Dilnot’s explicit aim.
Here’s John:
And here’s Alice:
But what happens to those housing assets when the individual dies? The can’t take them with them. The answer in most cases is that they will go to their family. Yes,
Cheap Christian Louboutin Pumps, large bequests will be subject to inheritance tax,
rayban sunglasses, but most people are unaffected by this levy.
So the state will be paying for the expensive social care of individuals in order that they can pass on wealth to their families. Is that efficient? Is that progressive? I’m not sure that it is.
And what’s disappointing about Dilnot is that it does not examine the moral or economic case for protecting this asset transfer across the generations. It takes it as given that individuals have a right not to have to use their property wealth to pay for their care.
Before the last election when Labour was examining a flat levy on estates to pay for social care the Tories plumbed the depths of cynicism with posters about Gordon Brown’s “death tax”.
It’s depressing to see Dilnot apparently swallowing the logic of that attack.
Now there are some caveats here. I accept that it is unfair that the property rich and frail elderly should have to sell their lifelong homes and move out in order to raise cash for their care. But the solution to that is equity release – let them borrow money secured on their house,
Puma Ferrari Future Cat GT, stay in the old home,
Links of london bracelet, and at death the property goes to the bank to sell (any cash left over after the costs of the loan are recouped should go to the family).
I also think there is some powerful logic in capping the lifetime care costs that the individual will have to bear. It is clearly important to give people some peace of mind about the extent of future expenses. It is also a necessary condition, according to Dilnot, for the development of a market so people can insure against potential future care costs.
But the lower the cap, the greater the benefit to the wealthy. Look at that graph above. It shows that the further up the wealth scale an individual is (horiztonal axis), the smaller the proportion of their assets are depleted.
Dilnot implies that this is a price worth paying to protect the assets of those with moderate housing wealth. It’s certainly an arguable point. But the argument needs to be at least made.
This is part of a bigger picture. Dilnot seems to accept that there is something “special” about property wealth. But this is the mentality that has made us into a nation obsessed with bricks and mortar. The social costs of this – expensive property,
thomas sabo bracelets￡?thomas sabo bracelets black, first-time-buyers priced out etc – have been extensively chronicled.
Dilnot’s report is a thoughtful piece of work in many ways. And it might be that there is no way around the favouring of property wealth if the system he proposes is to function. But I would have been more reassured if Dilnot had spent some time explaining his premises.
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