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Tories and Lib Dems agree on capping costs of long-term care. No elderly person will have to sell their homes in order to meet care bills.

By Tim Montgomerie
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"From April this year, no one will have to sell their home to fund care.
Those unable to afford fees will get the right to defer paying."

That's the Coalition's big promise to the elderly as made in today's Sun and across the Sunday newspapers. Proving that the Coalition parties can still work together Jeremy Hunt will announce tomorrow that, from 2017, the elderly will have to pay a maximum of £75,000 towards their care costs before the taxpayer starts to help them.

The £75,000 cap - double the amount recommended by Andrew Dilnot's Commission - is said by Tory spindoctors to strike the right balance between supporting those who've saved without imposing heavy new taxes on working families.

One of the ways in which the Coalition will fund what is expected to be a £1 billion reform is a further three year freeze in inheritance tax thresholds. In opposition George Osborne famously promised to abolish inheritance tax for all but millionaires. This second three year freeze - following one already introduced by Alistair Darling - will raise about another £200 million per year for Treasury coffers.

The reform is likely to be popular with voters. A YouGov survey for The Sunday Times (PDF) finds that 73% of people support a cap on the amount that people contribute towards the cost of care. Only 13% oppose. 66% of people would prefer a cap of £50,000 or lower, however. It was budget-conscious George Osborne who fought successfully for the agreed and much cheaper £75,000 policy.

This move is not without its critics, however. The Centre for Social Justice believes that the government should use scarce resources for other care challenges. It would, for example, prefer money to be focused on:

  • helping the poorest elderly people remain independent in their own homes for as long as possible;
  • fairer wages for people in what it describes as a "demoralised" care industry; and
  • rigorous dementia training for all care workers.

A PDF of the CSJ's concerns can be read here.


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