View the article online at http://citywire.co.uk/money/article/a602985
Long-term care reform delayed by funding woes
The government is expected to back the Dilnot Commission's proposals for long-term care reform, but will delay implementation as it struggles to find funding.
The government is expected to put forward plans to cap the amount people pay for their old age care this week, but will delay its decision on how the reforms will be paid for.
The plan for how to deal with the increased need and cost of long-term care will be contained in a ‘progress report’ on social care funding, which will be published on Wednesday alongside a paper detailing reforms to services for disabled and elderly adult, according to The Telegraph.
The details of the cap are unknown but is expected to follow recommendations from economist Andrew Dilnot, whose Dilnot Commission was tasked with reforming long-term care for the elderly.
Last July the commission proposed capping individuals’ care costs at £35,000 and increasing the means-tested threshold which would mean those with assets of £100,000 would receive some state help with care. Currently, those with assets of £23,000 receive no help from the state.
Dilnot also proposed individuals should be expected to take out private insurance to pay for care bills up to £35,000.
However, the cost of Dilnot’s plans may prove prohibitive as it would require chancellor George Osborne to spend an extra £1.7 billion a year. Although the government is expected to back Dilnot’s proposals on Wednesday, it will delay making a decision about how it will pay for the reforms for another year – meaning pensioners will not benefit from Dilnot’s proposals before the next general election.
A source told The Telegraph: ‘There is support for the principle of Dilnot. But there is no money at the moment so it has to be considered in the spending review. If we have the money at the spending review we will do something that looks like Dilnot.’
As people live longer the cost of care continues to rise, putting a strain on families of elderly people who need care. Currently 20,000 people a year are forced to sell their home to pay for care bills.
According to insurer LV= the current cost of care is £26,000 a year but that cost is set to rise to £33,000 by 2025.
As life expectancy rises more people will need long-term care. Currently 840,184 people make use of formal care services but this number is expected to rise to 1.1 million by 2025.
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In association with Aberdeen Asset Management
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