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Ex-care minister: means test winter fuel allowance to fund Dilnot reforms
by Jun Merrett on Jan 03, 2013 at 11:59
The former minister of care services has proposed means testing winter fuel allowance to help fund Andrew Dilnot's proposed long-term care reforms.
Paul Burstow, MP for Sutton, Cheam and Worcester Park, who was minister of state for care services from May 2010 until September 2012 has argued winter fuel allowance should only be given to those receiving pension credit.
A report written by Burstow and think tank Centre Forum predicted this would save £1.5 billion a year with three quarters of people currently receiving the allowance set to lose it.
The report also proposed scrapping capital gains tax relief at death which it anticipates would raise £600 million a year.
Under proposals from by economist Andrew Dilnot (pictured) to reform long-term care funding the government would fund care costs above £35,000, excluding care home costs. Individuals currently have to pay for their care costs if they have more than £23,000 in savings.
However Burstow has proposed the cap on people's own funding to their care would be set at £60,000.
Dilnot's proposals, which were published in July 2011 have faced delays in implementation but in October 2012 the government pledged that it would implement the £35,000 cap as soon as possible.
Independent pensions expert Ros Altmann argued Burstow’s proposal punished savers and could lead to more people relying on the government for care fees.
'Taking money away from older people who have been prudent and provided for their own future, would be a further major disincentive to those hard-working people who have set money aside for retirement,’ she said. ‘It is likely to mean more people deciding not to bother to look after themselves, since they see colleagues who may have chosen not to bother setting aside sums for the future receiving far more than they do.'
Altmann also said care fee funds could be raised by taxing pensioner benefits or increasing the age of entitlement but any rule must be universal to ensure all pensioners receive money and are not dissuaded from saving for retirement.
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