[Oldmanmatt]

Just sayin'...




Sent from my iPhone using Tapatalk

[abarro81]

You mention death tax/fuel allowance/free travel cards/triple lock etc, having paid tax, paid you National Insurance etc surely in old age you should be entitled to be treated with dignity and well looked after.

Being treated with dignity and well looked after is not inherently synonymous with having your care funded in an unsustainable manner or having an absurd triple lock though is it.

If death tax becomes a reality and in old age I am ill and end up in care for years then i will leave behind very little inheritance, which is a crazy state of affairs. Having worked/contributed for nearly 50 years. We should be looking out for each other not fleecing each other.

It strikes me as ironic when a left-wing anti-tory opposes what seems to me to be, in effect, a roundabout way of hiking inheritance tax in order to overcome shortfalls in care budgets. I'm sure that simply increasing inheritance tax would actually be a much better solution, since it removes the lottery/luck aspect of the "death tax" (which in this form is more like a "getting ill tax"), but this would seem to me to be a step towards this rather than a step away from it, and thus likely to be a step in the right direction. You may have worked and contributed for 50 years, but it seems like it's now clear that those contributions were not and are not enough to fund what you would like it to fund. Using money locked up in property to fund it, via a round-about tax seems kinda sensible to me?

On the more minor subject of things like means testing the fuel allowance, again I don't understand how a left-winger would argue that it makes sense for my mum and dad get a fuel allowance to heat their huge, posh houses courtesy of the state? Unless of course it's a logistical thing in that doing the means testing costs as much as just sending out the money to everyone... although at least then it provides jobs at the expense of the rich so actually even then it could be considered advantageous from a redistribution of wealth point of view.

Back on the main point...
I'm totally open to accepting that I'm missing something, and I'm open to conservative arguments that inheritance tax is somehow unfair, but I can't quite get my head around left-wing pro-wealth-redistribution people considering it a bad idea per se, although I can see why it's a bad idea in comparison to a more equitable hike in the inheritance tax rate. Perhaps my views would be different were I old and had worked all my life to save money to pass on to my kids... but then I'd be a Tory voter probably, ironically.

What am I missing?

P.S. Should point out that I've not read the manifesto, so only know what I heard on the news

[Will Hunt]

I have to say that I'm with Alex here in not yet being convinced that changing the rules on paying for elderly care is a bad idea. I'm not sure if the proposal is the right mechanism to do it by (haven't got my head round it enough yet), but where there are increasingly more old people with more complex care needs it's not reasonable to expect to have to raise extra revenue for elderly care.
It's quite an astute move from the Tories to do all the shit that they knew they were going to have to do to one of their core voting blocks at a time when they're almost guaranteed an election win. Putting it up front in the manifesto will legitimise it because they'll be able to say they had a strong mandate for it.

[jfdm]

1.Being treated with dignity and well looked after is not inherently synonymous with having your care funded in an unsustainable manner or having an absurd triple lock though is it.

2. It strikes me as ironic when a left-wing anti-tory opposes what seems to me to be, in effect, a roundabout way of hiking inheritance tax in order to overcome shortfalls in care budgets.

3. On the more minor subject of things like means testing the fuel allowance, again I don't understand how a left-winger would argue that it makes sense for my mum and dad get a fuel allowance to heat their huge, posh houses courtesy of the state?

1. Is it though abarro, is it unsustainable, I can speak for myself, never claimed any benefits, in full time work, have no kids, apart from the occasional visit to the doctor, I don't think I am too reliant on the state for handouts. I would expect having worked hard to be able to retire with grace rather than constantly having to mind the pennies in case I fall ill. A cap on contributions seems fair.

2. There in lies the problem it is a double tax, inheritance tax plus death (care) tax. I don't mind paying more of my working wages to create a decent place for everybody to live and work in. But if over 30 year I have paid off my mortgage then surely it is up to me how financially this should be passed on, not the state.

3. No problem with means testing, it could be a good idea. The issue I have is that those that need it will have to pass through so many hoops it will be impossible to claim the benefit. That's my beef with this.

By the way wouldn't say that I am left winger, just want to live in a place were people are treated with a little more dignity and support for each other. I am not getting that vibe from the conservatives.

I'm not on my own in thinking that Tory welfare policy is a bad idea.
https://www.theguardian.com/politics/2017/may/18/tory-social-care-plan-example-market-failure-andrew-dilnot

[Schnell]

On the more minor subject of things like means testing the fuel allowance, again I don't understand how a left-winger would argue that it makes sense for my mum and dad get a fuel allowance to heat their huge, posh houses courtesy of the state? Unless of course it's a logistical thing in that doing the means testing costs as much as just sending out the money to everyone... although at least then it provides jobs at the expense of the rich so actually even then it could be considered advantageous from a redistribution of wealth point of view.

One of the main arguments in favour of universal rather than means tested benefits is that it gives everyone including middle classes a sense of benefitting from the welfare state, rather than a situation where people with high incomes paying income tax but not getting any direct benefit end up feeling like they are subsidising a group who are different from them whether deserving or undeserving doesn't really matter.

[Will Hunt]

As soon as some journo does a breakdown of how the care system works now and how the proposals will make it difference could somebody post a link? As I try and think about it it's making me realise that I'm starting from a point of very little knowledge.

[jfdm]

Looks like the wheels on the bus might be about to fall off 
http://www.yorkshirepost.co.uk/news/video-protestors-threaten-to-disrupt-tory-manifesto-launch-in-halifax-1-8549761

[dave]

Anyone spot the voter suppression bit in the Tory manifesto? Clearly this is going to adversely impact on the labour vote more than the tory vote, funny that. http://www.independent.co.uk/news/uk/politics/conservative-manifesto-general-election-2017-voter-id-laws-racist-voters-poll-latest-a7742666.html?cmpid=facebook-post

[abarro81]

1. Is it though abarro, is it unsustainable, I can speak for myself, never claimed any benefits, in full time work, have no kids, apart from the occasional visit to the doctor, I don't think I am too reliant on the state for handouts. I would expect having worked hard to be able to retire with grace rather than constantly having to mind the pennies in case I fall ill. A cap on contributions seems fair.

If we currently can't afford it then yes, it's unsustainable. I get the distinct impression that we currently can't afford to continue to have social care and the nhs provided free at current (or ideally improved) levels without raising money from somewhere. My current view is that this doesn't necessarily seem like a bad way to go about raising that money. How much money you've put in or taken out of the system seems irrelevant: This argument seems to be "I don't use the state now so I want the money I've paid in back out later". That's not really how I understand the welfare state, nor the general concept of taxation and national insurance, to be supposed to operate. The point of an insurance program is surely basically that the majority will put in more than they take out and the few who require it will take out far more than they put in. If you think that you're owed more out in old age than those who've been reliant on the state in earlier life then I really don't understand how you're not fundamentally aligned with Conservative ideology.

A cap still exists under this policy, just a cap that works by reducing everyone to the same finishing level rather than everyone paying the same total amount. A cap on contributions is thus more 'fair' from a conservative viewpoint than a bottom point of assets acting as the 'cap', but in many ways is less fair since the millionaire and the man with very little pay the same. It's basically only fair in the same way that a flat rate of taxation is fair surely? (or not even a flat rate but a flat fee)

2. There in lies the problem it is a double tax, inheritance tax plus death (care) tax. I don't mind paying more of my working wages to create a decent place for everybody to live and work in. But if over 30 year I have paid off my mortgage then surely it is up to me how financially this should be passed on, not the state.

Ironically, your argument strikes me as basically the natural Conservative argument relating to why inheritance tax should be lower rather than higher. Or, for that matter, why taxation should be lower rather than higher full stop: "It's my money, I earned [or inherited!] it, so I should be able to spend it how I choose". On the preferable form of taxation we fundamentally disagree I think - I would view raising increased funds for social care through inheritance tax rises (of which this seems to be a bastardised version) as preferable to raising it through working age taxes. Perhaps that's just self-serving in that I'd rather have the cash now than when I'm dead, but it also seems likely to be advantageous from a meritocracy and wealth-redistribution/social mobility point of view. Again, a simple increase in inheritance tax would seem fairer. (I'm open to economic/social arguments about the merits/issues of having a system that could incentivise people spending more during their lifetime as the probability of handing it on to your children is decreased due to higher inheritance tax/this proposal.)

3. No problem with means testing, it could be a good idea. The issue I have is that those that need it will have to pass through so many hoops it will be impossible to claim the benefit. That's my beef with this.

Perhaps its naive of me, but I was thinking about policies themselves, rather than their implementation.

[Nigel]

Perhaps its naive of me, but I was thinking about policies themselves, rather than their implementation.
[/quote]

It may well be naive, knowing the tories! I suspect there is a lot hiding in the implementation.

I'll come clean up and admit I haven't read the manifesto wording, so this is just my initial take based on headlines and I'm happy to be corrected by a more considered view! RE social care the policy on the face of it does seem "sort of" progressive i.e. someone with a million quid in assets could see that "taxed" at up to 90% if they live long enough whilst also needing care, whereas someone with 100K would be "taxed" at 0%. However if you consider the implementation I can see two problems:

1. Those with higher assets wishing to avoid this tax may be able to via behavioural changes e.g. putting wealth in trusts, gifting to children, or simply just cashing in and spending all of it leaving the state to pay for care. These are the usual IHT skirting methods and so may have been closed off so I could be wrong, although as far as I'm aware they still exist for IHT and have done for ages so I would expect they do here. Spending it all in this case has an element of "dodging" that it doesn't for IHT as there is still an ongoing cost to the state not present when someone dies. These are the standard tory arguments against labour tax plans so I don't see why they shouldn't apply here. Following on from this, if this does cause a shortfall in expected receipts what is the action plan? Find the money elsewhere or reduce care levels? Has this been covered in manifesto (I will try and read it later).

2. How is this money going to be released? Two separate considerations - first, for e.g. if your house is 100K and you have 100K in bank when you need first need care is 100K the amount you are liable for? Who assesses this? What is to stop you just spending the liquid 100K? Obviously you would still have then have 100K in assets but these may be illiquid - do the bailiffs come round? Could you "hide" it offshore?

Second, simple case of someone in a 200K home, no other assets. They are liable for 100K max care costs. Lets say that they use this. What is the mechanism for doing so? There will have to be a way of releasing equity from the home. Is this done via a government entity or via a private company? If private, what interest are they charging? Appears to be a route for profits to be diverted to private companies. And what is the position of the heirs when they own 50% of a house with a finance company upon their spouse / parent's death? Again may be in manifesto which I will try to read later but I'm interested to hear what people think.

[monkoffunk]

Not entirely sure of mechanism but I've heard talk of 'deferred payments' and the Tories are saying you won't have to sell your house when you are alive. So my understanding is you don't pay upfront but you do have to sell your house/release equity somehow once you are dead.

[dave]

Isn't selling your house while dead going to be the last thing a recently-departed corpse is going to want to do? It's bad enough when you're alive.

[Nigel]

Not entirely sure of mechanism but I've heard talk of 'deferred payments' and the Tories are saying you won't have to sell your house when you are alive. So my understanding is you don't pay upfront but you do have to sell your house/release equity somehow once you are dead.

Interesting. So you pay after care has ended (death)? In that case, presuming all liable wealth is tied up in the house - who values this and when? Do you get a total bill for social care at death and then have to wind up the estate (inc. selling house) so you can see what your financial position is? If house values plummet then the state loses money - have they costed this? Also what is to stop heirs selling the house to a "friend" at way below market rate to avoid all costs then buying it back at a slight premium (the "friend's" cut) and retaining all the value with nothing for the state?

In the case where you release equity, who values the house? If its a private firm then clearly they are incentivised to undervalue the home thus cheating both the state and heirs of proper value. The only counter I can see to that is if independent valuation is required, then the firm will only buy at a discount thus diverting money theoretically earmarked for care costs to the private finance provider. What is this discount and who polices it? And in the case of a >200K house as only asset to cover a large care bill, the equity provider will then own >50% of the house. Again, where does this leave the heir? I presume they will receive a "friendly offer" to buy their share out by the selfsame equity firm who will then recycle the whole house for sale at profit or added to the stock of private rented homes? God I'm cynical!

[abarro81]

For sure the mechanism is a tricksy one.. my initial thinking that it sounds like a non-too-hideous plan is based on a presumption that the mechanism is applied in a reasonable manner, e.g. the state effectively becomes the primary payee in your will, with your estate being used to settle the balance either until it is paid of until £100,000 after your death..

Also what is to stop heirs selling the house to a "friend" at way below market rate to avoid all costs then buying it back at a slight premium (the "friend's" cut) and retaining all the value with nothing for the state?

Pretty sure selling at below market value to those you're connected with is already banned due to implications on avoiding things like stamp duty on 2nd homes, inheritance tax etc.

[Nigel]

For sure the mechanism is a tricksy one.. my initial thinking that it sounds like a non-too-hideous plan is based on a presumption that the mechanism is applied in a reasonable manner, e.g. the state effectively becomes the primary payee in your will, with your estate being used to settle the balance either until it is paid of until £100,000 after your death..

Interesting that you would presume that the mechanism would be reasonable! I would prefer to suspect not until evidence to contrary. Like I say I will try to read manifesto and clarify. Your basic assumption stated above still raises the question for me of when the "valuation" of assets is done. If at death then what is stopping £1million in cash suddenly becoming £1million worth of art while mum / dad is on their deathbed, which is then bequeathed to heirs - do the bailiffs appear? Or are assets of this type not included? If not then that is an obvious flaw RE cash and wealth will be passed down and not diverted to state. And my query over who values the house at death and what mechanisms are in place to prevent private equity vultures taking profitable advantage of someone's death still stands.

Also what is to stop heirs selling the house to a "friend" at way below market rate to avoid all costs then buying it back at a slight premium (the "friend's" cut) and retaining all the value with nothing for the state?

Pretty sure selling at below market value to those you're connected with is already banned due to implications on avoiding things like stamp duty on 2nd homes, inheritance tax etc.

I have no doubt you are right. Though it "being banned" and it not actually happening in practice I would want to see some evidence on before slapping Theresa on the back!

[Nigel]

Following on from the first part of my last post, can I summarise that theory (which is all it is) as "if you are rich in cash you and your heirs are fine, if you only own a house you're fucked"?

[IanP]

For sure the mechanism is a tricksy one.. my initial thinking that it sounds like a non-too-hideous plan is based on a presumption that the mechanism is applied in a reasonable manner, e.g. the state effectively becomes the primary payee in your will, with your estate being used to settle the balance either until it is paid of until £100,000 after your death..

The general principle of paying for late life social care out of some sort of inheritance tax (though the tories would deny that it's this of course) is something I would probably support but this seems badly thought out and makes no real attempt to resolve real problems people have with the inability to have any certainty around social care costs.  It just leaves the payment of of potentially very significant costs as a reverse lottery on those who are unlucky enough to llive with longer periods of ill-health at the end of there life.

The market has failed to find a mechanism to deal with the issues of spiraling social care costs and it seems like something the government should be involved with .  Andy Burnham suggestion of a 10% inheritance tax levy on all estates to pay for everyone's late life care seems to be a much better option, providing the type of risk pooling which is a much better way to deal with these sort of issues, particularly since there's very little individuals can do to impact there personal likelihood of incurring these costs (outside of big increase in one way easyjet flights to Switzerland!). But of course this suggestion was slammed by the right wing press as a 'death tax'!

[tomtom]

The main difference that (I think) everyone has missed - is that this means that care at home is now means tested via this new method. Before it was just if you had to move out to a home etc.. As c.75% of old people receiving some sort of care are having this in their own home it potentially impacts a lot of people.

Also, previously you had to have < £32k in savings/income to receive help - now its < £100k in assets. As the average house price is now >£200k.

[Will Hunt]

Also what is to stop heirs selling the house to a "friend" at way below market rate to avoid all costs then buying it back at a slight premium (the "friend's" cut) and retaining all the value with nothing for the state?

Even now, all across the land, new Limited companies for this very purpose are speculatively being registered. Well they do say that the Tories are good for those with an entrepreneurial spirit!

The main difference that (I think) everyone has missed - is that this means that care at home is now means tested via this new method. Before it was just if you had to move out to a home etc.. As c.75% of old people receiving some sort of care are having this in their own home it potentially impacts a lot of people.

Also, previously you had to have < £32k in savings/income to receive help - now its < £100k in assets. As the average house price is now >£200k.

This. We can't really understand this policy unless we understand how the current system works and how this changes it. What is the mechanism for payment and when is payment taken? There is a difference between nursing care and social care. Right now you pay in cash and you pay up front I believe. More than that, I don't know, but I'd like to know. However I don't have time to go deep diving through .gov pages, hence my interest in seeing a good impartial (is that really too much to ask?!) breakdown in the news.

[lagerstarfish]

I've spoken to a few retired people recently who have sold their homes, gone into private rented and then applied for (and got) council homes - with the intention of enjoying their wealth (travelling etc), safe in the knowledge that if they spend up, they will still have a home where rent will be affordable (even on only state pension, pension credits, housing benefit). Looking like a smart move

[Nigel]

For sure the mechanism is a tricksy one.. my initial thinking that it sounds like a non-too-hideous plan is based on a presumption that the mechanism is applied in a reasonable manner, e.g. the state effectively becomes the primary payee in your will, with your estate being used to settle the balance either until it is paid of until £100,000 after your death..

The general principle of paying for late life social care out of some sort of inheritance tax (though the tories would deny that it's this of course) is something I would probably support but this seems badly thought out and makes no real attempt to resolve real problems people have with the inability to have any certainty around social care costs.  It just leaves the payment of of potentially very significant costs as a reverse lottery on those who are unlucky enough to llive with longer periods of ill-health at the end of there life.

The market has failed to find a mechanism to deal with the issues of spiraling social care costs and it seems like something the government should be involved with .  Andy Burnham suggestion of a 10% inheritance tax levy on all estates to pay for everyone's late life care seems to be a much better option, providing the type of risk pooling which is a much better way to deal with these sort of issues, particularly since there's very little individuals can do to impact there personal likelihood of incurring these costs (outside of big increase in one way easyjet flights to Switzerland!). But of course this suggestion was slammed by the right wing press as a 'death tax'!

I was just starting to consider the larger “ideological” aspects (as opposed to the implementation) of this policy so Ian your post is timely, and on first pass I agree with it.

Social care is arguably an extension / natural partner of NHS services. Separating it out both in practice (on the ground) and financially (how it is funded) seems on the face of it illogical and for me requires an explanation of the reason. Basically if you get unfortunate enough to get ill you are protected by the universally funded free at point of use NHS. If you get old which you definitely will then you get rinsed, with echoes of how the American system works – the amount you get rinsed depends on a) how much you’re worth, and b) how old you are (i.e. how much care you need). As Ian says the inequality is startling – you could live a long time, be a millionaire, not need care then drop dead one day and you’re sorted (or rather your heirs are). Or you could be someone who has worked hard all their life on a basic wage, paid off a mortgage, accrued a huge value increase in your home (by default not design) meaning your small 2 up 2 down is now worth >100K, then get old and watch a chunk of your only asset, your house, which under current IHT only regime would go solely to your heir, end up in the hands of a private equity firm. You can see how this looks unfair. It may also lead to unintended social consequences e.g. increased suicides amongst old people, and families avoiding care costs by taking it on themselves when not fully equipped to deal with their relative’s needs.

To my mind on first impressions a better solution would be to make social care a provision of a new government service equivalent to the NHS, or a subsidiary of the NHS. Reasons against?

Finally I think the fact that this has come up in the tory manifesto shows two things politically – first that Corbyn’s attacks on this in numerous PMQ’s have actually hit home and prompted some action. Granted for those not enamoured of Corbyn this may well have happened in a different universe under a different leader, so lets just chalk it up as a labour success. Secondly Theresa May seems to be saying to a large section of her core vote – “you’re next”. Knowing they will still vote for her. Which they will. The mind boggles.

[jfdm]

It is great to think about things a bit more deeply.

Had a quick tinty search abarro and found this, from the tory graph earlier this year.
http://www.telegraph.co.uk/money/consumer-affairs/92000-average-cost-care-home-britains-costliest-regions/
You stated that paying for care using your house as a back stop would help with redistribution.
Unfortunately this isn't the case and may depend on where you live.
So somebody down south will possibly have higher care costs, than somebody up north.
But those down south will be better off as the cost of care as a percentage of their property is smaller.
So yes it might raise money, is it fair no, does it help with redistribution no.
*Caveat these are average costs, some people will obviously need more/less care.

Yes as a country we need to pay our way collectively to maintain the services that we often take for granted.
You do this through fair taxation making sure everybody pays, why not start with the tax dodgers/avoiders/big companies rather than the little man on the street.
The government can then come calling me once they have sorted this area of the stable out.

I like the double speak though abarro, if I support the plans then I am a Tory, if I am against the plans then I have a Tory outlook?

[IanP]

The main difference that (I think) everyone has missed - is that this means that care at home is now means tested via this new method. Before it was just if you had to move out to a home etc.. As c.75% of old people receiving some sort of care are having this in their own home it potentially impacts a lot of people.

Also, previously you had to have < £32k in savings/income to receive help - now its < £100k in assets. As the average house price is now >£200k.

This. We can't really understand this policy unless we understand how the current system works and how this changes it. What is the mechanism for payment and when is payment taken? There is a difference between nursing care and social care. Right now you pay in cash and you pay up front I believe. More than that, I don't know, but I'd like to know. However I don't have time to go deep diving through .gov pages, hence my interest in seeing a good impartial (is that really too much to ask?!) breakdown in the news.

It's actually £23,500 in savings for care at home.  My father in law is self-funded for his care at home for this reason and as his health deteriorates costs are increasing - he currently covers it out of his police and state pension but the uncertainty is not helpful.  If he moves into care home then costs will increase massively and he may need to sell his house depending on timescales. 

As you say more details would be needed to better understand what this policy would mean but to me even giving it the benefit of the doubt doesn't seem to attempt to resolve the core issues around long term old age care.

[tomtom]

Sorry - got 32 and 23 mixed up.

[jfdm]

I am really sorry to hear this Ian, it is a really sad state of affairs.