Page last updated at 14:47 GMT, Tuesday, 14 July 2009 15:47 UK

Compulsory social care bill plan

By Nick Triggle
Health reporter, BBC News

Public reaction: "What would you expect to get back?"

People in England may be forced to pay as much as £20,000 on retirement to help fund the social care system under plans being put forward by ministers.

It is one of three options being proposed by the government alongside top-ups and insurance.

In return, the government said a certain amount of social care would be provided free to everyone, while accommodation costs could be deferred.

The current means-tested system is considered unfair and unsustainable.

Social care covers everything from home help with washing and dressing through to full-time residential care.

At the moment, anyone with a home or savings of £23,500 or more is not given any state funding for their care.

Partnership - The state guarantees certain level of care - maybe up to a third - leaving the individual to pick up tab for the rest. For some this could run into tens of thousands of pounds
Insurance - The same as partnership, except that the government would help set up insurance schemes for people to pay into to cover extra cost
Comprehensive - Payments of up to £20,000 to be paid after retirement, in return all social care, except accommodation costs, would be paid for by state

About three quarters of people in the system fall into this category.

This means that thousands of pensioners each year have to sell their homes or use their savings to fund their long-term care.

Experts predict the situation is only going to get worse in time with the ageing population.

Health Secretary Andy Burnham said the government was trying to be bold in a bid to encourage a debate.

"For too long politicians have avoided this issue.

"We have an opportunity to grasp the nettle and confront the debate.

"If we fail to do that we face the prospect of a diminishing quality of care being provided."


Ministers have put forward three options which will be considered during a four-month consultation.

Under the partnership model, between a quarter and a third of costs will be covered by the state, while the individual will be left to top-up the rest of their care.

The insurance option builds on this by again promising a certain level of basic care free, with the government helping to establish insurance systems for people to pay into to cover for the extra costs.

The paper signals a welcome willingness to confront some of the hard questions about how to fix our broken care system
Michelle Mitchell, of Age Concern and Help the Aged

This would be free to opt in and opt out of.

The third - and in many ways most controversial - proposal is a comprehensive system whereby people are forced to pay up to £20,000 on retirement to fund their social care package.

This could be paid in a lump sum, through instalments or taken from an individual's pension, ministers said.

Under all three plans, the poorest will have their full care package paid for by the state.

The government argues many people will be better off under these models as the average cost of social care for a 65-year-old is £30,000 over the rest of their lifetime.

And to end the "injustice" of people losing their homes when they go into care, ministers proposed allowing people to defer the costs of residential care until their death when the bill would be taken from their estate.

Ministers said it was now up to the public and social care sector to give their feedback on the plans.

Michelle Mitchell, director of the newly-merged Age Concern and Help the Aged charity, said she had concerns about the compulsory payment option and the fact people would still have to pay for accommodation costs.

But she added: "The paper signals a welcome willingness to confront some of the hard questions about how to fix our broken care system.

"All political parties and the public must now look beyond the short-term squeeze on our national finances to agree a fairer way to pay for care."

But shadow health secretary Andrew Lansley said: "We don't need to start another debate. One debate always seems to roll into another with this government.

"We need a decision, and we need serious, costed proposals to be the basis of that decision."

It will be another five years before any changes come into effect.

The shake-up has only been proposed for England although Wales and Northern Ireland, which both use means-testing, are considering reform.

In Scotland, everyone who meets the criteria gets free social care although that threshold is set quite high to only include those with the most severe needs.

England population projection

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