Page last updated at 17:01 GMT, Tuesday, 9 February 2010

Inheritance levy to pay for social care denied

Health Secretary Andy Burnham: "I do not believe that a flat levy of that kind would be the right way to go"

The government has denied reports it is planning a fixed £20,000 compulsory inheritance levy to help pay for social care for the elderly in England.

The levy would be deducted from the estates of elderly people when they die, according to the Guardian.

But Health Secretary Andy Burnham said: "I do not believe that a flat levy of that kind is the right way to go".

He said the government would set out "firm proposals for change" in a white paper before the general election.

The issue of how to pay the care costs for England's ageing population looks set to be a key battleground during the election campaign. Scotland already has free personal care.

Older people and their families deserve a care system which enshrines dignity and fairness
Michelle Mitchell, Help the Aged and Age Concern

The Conservatives have put forward a plan for an optional £8,000 fee so elderly people can avoid paying for residential care.

In contrast, the government put forward three proposals in a green paper last summer covering both care homes and help in the home.

Mr Burnham said these were: "A partnership model where people get some of their care costs met but not all, a voluntary insurance model, where people would choose to be able to opt in to cover all of their care cost and a comprehensive model where people would have to contribute but where they would get all of their care costs met."

Mr Burnham said the current arrangements were not sustainable and he wanted to see "a fairer system" in place.

Social care is currently means-tested, meaning thousands of people have to pay for help washing, dressing and eating or to move into a care home.

On top of that the ageing population means that eligibility has been further restricted by councils insisting only those with the most severe needs can get help even if they qualify financially.

Major reform

While Mr Burnham has ruled out a flat levy, it is understood that some kind of payment could still be imposed.

The green paper talked about having a compulsory system that people paid into, but having a sliding scale of payments depending on wealth.

Shadow health secretary Andrew Lansley said it was clear that some kind of compulsory payment was still on the table.

"Behind closed doors ministers are secretly planning a death tax of up to £20,000 per head which would be levied on the estates of grieving families."

Campaigners have long argued the system is in need of reform, although experts have been split over which is the best model.

A recent report by Birmingham University researchers found the costs of care could double in the next two decades if left unchanged.

Michelle Mitchell, charity director for the newly merged Age Concern and Help the Aged charity, said: "In the run up to the next general election, we're calling for all political parties to set out definitive plans for reforming the entire care and support system.

"Older people and their families deserve a care system which enshrines dignity and fairness - it's time for our politicians to deliver this for them."

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