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Specialist lawyer hopes Dilnot report will lead to actual reforms
Article date: 08/07/2011
A leading Midlands lawyer says that the long-awaited Dilnot report looking at the elderly social care funding system in England does not go far enough for his clients and in many cases is too late to make a difference.
The Dilnot report on care for the elderly social care funding system in England states that the current system is "not fit for purpose and needs urgent and lasting reform".
According to Higgs & Sons' Philip Martin-Summers, the report does not offer anything that has not been said for the last decade or more.
Philip explains: "The last round was in 1997 when Tony Blair said at the Labour party conference that he didn't want his children brought up in a country where pensioners had to sell their homes to pay for long term care.
"Since then in excess of 200,000 homes have been sold to pay for care. The then Labour government made reforming the funding of care a priority and a Royal Commission reported in 1999 but it took until 2009 for the government to set out options for fundamental reform and by then it was too late."
Philip believes that the current system is brutal. "Anyone who has savings over £23,250 pays the full cost of their care unless they qualify for funding from the NHS. For some this amounts to almost 100 per cent 'taxation' of their assets as their families are left without an inheritance after nearly all their modest life savings are decimated. The system is seen as very unfair and a punishment for doing the right thing - working, saving and being thrifty."
Philip believes that many of the comments within the proposal will be welcomed by his clients. For example the current individual £23,250 capital threshold could be increased to £100,000. If this happened, a couple with a modest house of up to £200,000 would have the chance to protect the full value of their property with carefully drafted wills should one of them die and the survivor needed to go into care.
One major change to the current system could be the implementation of a distinction between care costs (washing, dressing, etc) and hotel costs (food and accommodation). The Dilnot report recommends that a cap of £35,000 be placed on the care costs, but the devil is in the detail as it then goes on to say that the 'hotel costs' should be paid for by the recipient of the care in full. The report recommends that these should be capped at £190 per week to avoid the problem they had in Scotland when a similar system was introduced, namely passing off care costs as hotel costs. But the report admits that this figure is a complete guess with no research being done to establish the true hotel costs. For many care home businesses the writing could be on the wall as few would be able to provide anything but the most basic of services for these capped costs.
Philip believes that most care homes will need to charge much more than this cap to keep their businesses afloat. "Under the Dilnot cap it will be for the resident to pay the difference to guarantee a decent standard of care.
"With government cuts biting hard it's difficult to see how the country can afford the £1.7 billion the Dilnot report estimates this will all cost without raising taxes, after all what else is there that can be cut? The target of any such tax rises could be the over 65s, possibly with a rise in income tax, hitting pensions and savings, or implementing National Insurance contributions for this age group.
"One suggestion in the report is to invite the financial services industry in to offer insurance against the costs. But historic mis-selling by the financial services industry of private personal pensions, endowment mortgages and mortgage insurance policies should give us all pause for thought."
If you would like advice Philip is available on 0845 111 5050 or by email firstname.lastname@example.org.