[jfdm]

i am going to re post my last contribution as I don't know if it sent properly apologies in advance if it has.

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?


 
 

[Davo]

The current system is exactly as IanP describes. My mother is currently in a nursing home and we have had to go through finding out all about care costs and how things work.

Currently if you are cared at home (most people) your house is not classified as an asset to be used in the calculations. In this case I found you have over £23,500 in assets in the bank or shares then you pay for your care until you reduce these to £23,500 and then social services do a financial assessment.

If you are in a nursing home, your house is included in the asset calculation. I believe the exception isn't if your spouse or dependent children are still living at home. So in this case it is most likely that at some point you will need to sell your house to funding the care (we almost certainly will at some point in the next 12mths). As i understand it the council probably won't force you to do this for quite a while and prefer to put a charge against the value of the house instead.

As a self funder, nursing home fees are approximately £1000 per week. So it doesn't take long before a large amount of most people's assets are gone. If the council pays they set a limit of about £500 that they will pay per week, which I believe (according to a documentary on radio4) is below the actual break even cost and so nursing homes cross subsidise the council funded patients with the private self funders.

I think a few people have mentioned lots of schemes to avoid these care costs. I looked into this a fair bit as we would have liked to try and save some of her assets (mainly greed on my part). Unfortunately the law has thought about this a fair bit and is pretty clear that this treated a son "deliberate deprivation of assets. If you have a reasonable idea that you might need care in the foreseeable future then you can not dispose of your assets to avoid these care costs. For example if you are told that you have severe heart failure, then you can't put your house or assets in a trust or gift them to your children etc. If this happens the council has the power to demand them back. There is also no seven year limitation as with inheritance tax.

The only way to avoid these care costs is to have put everything in trust or given it all to your children whilst you are fit and healthy.

Sorry if this is all a bit too much detail but thought it might be useful in the discussion to know exactly how things work at present.

Dave

[Davo]

personally I think that somehow we need to find a way to pay for the care costs that seem fairly likely at the end of life. On a personal note it would be great if we could avoid all the care costs for my mother and thus be able to inherit her house and the cash in her bank. However I am not sure that this is fair on others in society as a whole, by doing that we would basically be asking others in society to pay for her care costs whilst we as a family avoid that cost and then benefit from inheritance upon her death. Yes from my own perspective currently that seems great but I don't think I feel so generous when it comes to my own taxation being used to fund someone's care and their family then inheriting the estate when that person dies.
As to capping care costs and making sure that you are left with at least £100,000 left in assets. This is great in terms of passing on wealth down the family line but again I can't help but feel it is likely to pass a large amount of care costs onto the wider society. At the end of the day someone has to pay for the costs of care...

[dave]

https://twitter.com/withorpe/status/865465756393156608

[petejh]

personally I think that somehow we need to find a way to pay for the care costs that seem fairly likely at the end of life. On a personal note it would be great if we could avoid all the care costs for my mother and thus be able to inherit her house and the cash in her bank. However I am not sure that this is fair on others in society as a whole, by doing that we would basically be asking others in society to pay for her care costs whilst we as a family avoid that cost and then benefit from inheritance upon her death. Yes from my own perspective currently that seems great but I don't think I feel so generous when it comes to my own taxation being used to fund someone's care and their family then inheriting the estate when that person dies.
As to capping care costs and making sure that you are left with at least £100,000 left in assets. This is great in terms of passing on wealth down the family line but again I can't help but feel it is likely to pass a large amount of care costs onto the wider society. At the end of the day someone has to pay for the costs of care...

I agree with abarro's take on this. In theory it's a big step in a progressive direction that taxes the richest most highly and allows a £100k chunk to remain untaxed. Though I'd go further. I said a couple of years ago somewhere on here that the fairest tax system I can think of is to have extremely low income tax - to encourage industrious creators of wealth to create wealth for us all while they're alive; and extremely high inheritance tax - to discourage generational wealth-building and start to re-balance the wealth inequality which has built up in this country over hundreds of years.
A 10% income tax rate and a 80-90% inheritance tax rate on assets greater than, say for e.g., £500,000 (with current loopholes closed) would do a lot to help build a more equitable society. Details of implementation obviously are key. The implementation argument can be leveled at all parties, not just conservative. Just that the cons 'are' going to be implementing policies and Labour/Lib Dems aren't - anytime soon - until they get their shit together.
My self-made millionaire mate strongly disagrees, funnily enough, with my notion that he shouldn't be allowed to pass down millions to each of his daughters. Self-protection of genes versus greater good of society..

[tomtom]

personally I think that somehow we need to find a way to pay for the care costs that seem fairly likely at the end of life. On a personal note it would be great if we could avoid all the care costs for my mother and thus be able to inherit her house and the cash in her bank. However I am not sure that this is fair on others in society as a whole, by doing that we would basically be asking others in society to pay for her care costs whilst we as a family avoid that cost and then benefit from inheritance upon her death. Yes from my own perspective currently that seems great but I don't think I feel so generous when it comes to my own taxation being used to fund someone's care and their family then inheriting the estate when that person dies.
As to capping care costs and making sure that you are left with at least £100,000 left in assets. This is great in terms of passing on wealth down the family line but again I can't help but feel it is likely to pass a large amount of care costs onto the wider society. At the end of the day someone has to pay for the costs of care...

I agree with abarro's take on this. In theory it's a big step in a progressive direction that taxes the richest most highly and allows a £100k chunk to remain untaxed. Though I'd go further. I said a couple of years ago somewhere on here that the fairest tax system I can think of is to have extremely low income tax - to encourage industrious creators of wealth to create wealth for us all while they're alive; and extremely high inheritance tax - to discourage generational wealth-building and start to re-balance the wealth inequality which has built up in this country over hundreds of years.
A 10% income tax rate and a 80-90% inheritance tax rate on assets greater than, say for e.g., £500,000 (with current loopholes closed) would do a lot to help build a more equitable society. Details of implementation obviously are key. The implementation argument can be leveled at all parties, not just conservative. Just that the cons 'are' going to be implementing policies and Labour/Lib Dems aren't - anytime soon - until they get their shit together.
My self-made millionaire mate strongly disagrees, funnily enough, with my notion that he shouldn't be allowed to pass down millions to each of his daughters. Self-protection of genes versus greater good of society..

Yup - thats the argument that Inheritance tax is the best social 'leveller' - its not too dissimilar from the state owning everything ideas of communism (gentle troll... )

The pensioners are the elephant in the economic room... they take the largest slice out of the benefit budget - but have been protected from any austerity as they mostly vote Tory (and Brexit - but I won't mix apples and oranges etc.. ). If we hadn't had pension 'triple lock' or pensions linked to RPI instead of inflation etc.. then the chancellor would have had quite alot more money to play with over the last 7 years.. maybe we wouldnt have such a growing deficit either...

So, its quite brave of May (and probably Hammond) to take on the grey vote in this way - it actually reminds me of how they wanted to up NI on self employed people earlier in the year but that was barracked down..

Its a strange May steer on this Tory party.. quite alot of state intervention (not a typical Tory tactic) and some almost socialist ideas. But still with the usual swivel headed loon policies on immigration and fox hunting for example.

[petejh]

Yup - thats the argument that Inheritance tax is the best social 'leveller' - its not too dissimilar from the state owning everything ideas of communism (gentle troll... )

Not much of a troll to me, I'm quite alright with the idea of society - or community -  taking in death whatever I've made in life, leaving enough of a bunch of feathers for offspring to comfortise their nest. That's more than many have..

I'm of the mindset that nobody is born more deserving than anyone else and no-one is inherently more superior. Until, practically speaking, they clearly *are*. So much is down to who you're born to. You could argue some actually are more deserving than others, depending which point in life you start from. But whichever point you start from it seems to me we've reached a stage where 'wealth' - above a certain level - has become a poor indicator of 'worthiness'. Maybe it's the soldier in me: ultimately we're all in the same mud-filled trench facing the same enemies of illness, aging and death and 'you' really aren't anything special (whatever you believe).
One of my biggest concerns* with the way the UK is today (you can extrapolate this worldwide) is that where before perhaps only the wealthiest used to, now even many of the middle-class - in the face of greater competition for resources perhaps - seem to genuinely believe and be acting in ways that suggest they are superior and more deserving than the poorest; but more than that they're actually preying on the poorest, in ways that seem regressive, almost medieval.
So yeah I'd happily live in a system that broke apart the vice-grip of family wealth and privilege and shook the tree - the first act in that system would be to strip the royals and old aristocratic families of their land and assets, above a nominal value, and bequeath it to respective local councils... or 'communes' as they'd be in my anarchist version of the UK

Then impose a 90% death tax above half a mill, maybe less, and reduce taxes on the living to a minimum. It'll never happen but I can dream of the re-balancing of society and the resultant change of emphasis in how we all live that'd result.


* which doesn't keep me awake at night for one minute nor does it compel me to do much about it during the day - I don't care *that* much.

[mrjonathanr]

 Strong and stable u-turns. Corbyn can't win against that.

Can he?

[jfdm]

So no change, death tax on the cards, May just needs to tinker with admin side of things and everything will be fine. What could possibly go wrong. You only need to pay the Tories once you've popped it.
Watched the clip below and the Neil interview, st Teresa is definitely feeling the heat. About fucking time.

Jezzer sounds almost Churchillian in comparison

Strong n stable my arse.

[mrjonathanr]

Jeremy f Deller m, I presume?

[Fultonius]

Would it be too cynical to suggest that the dementia tax is a just backhanded way to open up more public money for private health care providers, under the guise of socialism?

It's very much an "upper middle class" tax, as the true wealthy will have it all safe and secure in trust funds, family businesses and other "tax efficient" ways.

[tomtom]

The more real (and equally cynical) reason might be that finance companies will benefit from selling 'capital release' plans/schemes/mortgages to oaps needing the £££ for care.

I saw one tweet that suggested that Mays husband was involved in selling such packages...

[gme]

I personally think that (with a number of stipulations listed below)this policy is one of the most radical ideas that has been put forward by either side in the whole election so far and actually more socialist than a lot of the lefts ideas.

I think that those who can afford to pay for there own care in old age should have to. It seems utterly absurd that you should rely on the government to pay for it all whilst you own assets worth far in excess of these costs; assets that then just get passed on to your next of kin after death with a minimum amount of tax. You might shout that you have already paid your dues to build that asset but your kids have not and pretty much get it gifted to them.

The issues i have though are in the detail.

How will it be funded- This should not allow any private companies to profit. No annuity type mechanisms.

It should not be used to reduce the spend on social care - The pot should remain the same but this policy should reduce the amount sharing the pot therefore increasing the standards of care for those unable to fund themselves.

The 100k figure needs to be looked at- Where does this sit in relation to the average estate value? It seems a reasonable sum to leave to my kids to me but some might disagree.

The loop holes for avoiding this need to be sorted- its presently so easy to avoid inheritance tax its a joke.

I find it amazing that Labour appear to be against the idea as it seems to be very much set up to take from the wealthy and help the not.

This is the 1st policy from either side that has really got to the problems that we face with long term care. Most of the other stuff you hear to much about such as re nationalisation of everything, fox hunting and free school lunches are just irrelevant in the bigger picture yet seem to clog up 99% of the social media space.

Its a brave effort from May as it really hits at the heart of most of her supporters. Its up to labour to now scrutinise the policy and ask the right questions.

I am not a Corbyn fan at all but can thank him that due to how shit the opposition has got its actually allowed the Torys to risk throwing something out there that needs to be done but will not be liked by their supporters, something that would not have happened if the polls were closer. I also find it interesting that a Tory policy that definitely sits to the left of their others has had a bigger effect on labours standing in the polls that all of there own put together.

[creedence]

I personally think that (with a number of stipulations listed below)this policy is one of the most radical ideas that has been put forward by either side in the whole election so far and actually more socialist than a lot of the lefts ideas.

I think that those who can afford to pay for there own care in old age should have to. It seems utterly absurd that you should rely on the government to pay for it all whilst you own assets worth far in excess of these costs; assets that then just get passed on to your next of kin after death with a minimum amount of tax. You might shout that you have already paid your dues to build that asset but your kids have not and pretty much get it gifted to them.

The issues i have though are in the detail.

How will it be funded- This should not allow any private companies to profit. No annuity type mechanisms.

It should not be used to reduce the spend on social care - The pot should remain the same but this policy should reduce the amount sharing the pot therefore increasing the standards of care for those unable to fund themselves.

The 100k figure needs to be looked at- Where does this sit in relation to the average estate value? It seems a reasonable sum to leave to my kids to me but some might disagree.

The loop holes for avoiding this need to be sorted- its presently so easy to avoid inheritance tax its a joke.

I find it amazing that Labour appear to be against the idea as it seems to be very much set up to take from the wealthy and help the not.

This is the 1st policy from either side that has really got to the problems that we face with long term care. Most of the other stuff you hear to much about such as re nationalisation of everything, fox hunting and free school lunches are just irrelevant in the bigger picture yet seem to clog up 99% of the social media space.

Its a brave effort from May as it really hits at the heart of most of her supporters. Its up to labour to now scrutinise the policy and ask the right questions.

I am not a Corbyn fan at all but can thank him that due to how shit the opposition has got its actually allowed the Torys to risk throwing something out there that needs to be done but will not be liked by their supporters, something that would not have happened if the polls were closer. I also find it interesting that a Tory policy that definitely sits to the left of their others has had a bigger effect on labours standing in the polls that all of there own put together.

It seems more likely to me that it will have the most impact on people who own their own houses, but have no other assets.  So that's the poorer end of society?  Especially considering the way the housing market has gone crazy over the last 20 years?

Not saying it's a bad policy (I am undecided) and something needs doing, but I think an increase in inheritance tax and closure of the loopholes there would have probably been fairer?

Additionally, right to die laws need to come with it.

[gme]

How on earth would owning your own home put you in the poorer end of society.

[AlistairB]

How on earth would owning your own home put you in the poorer end of society.

Our mental property market leaves plenty of people asset rich but cash poor, home ownership is very high in the generation currently needing this kind of care (see http://visual.ons.gov.uk/uk-perspectives-2016-housing-and-home-ownership-in-the-uk/).

I'm not too keen to get dragged into this debate but I feel that the current proposal is very crude and would be easily avoidable much in the same way as inheritance tax. We need to have this discussion for sure but this is a shit solution. You don't lose out financially by being unlucky and needing lots of NHS services. This proposal doesn't pool risk in the same way which I think is why it has been termed "dementia tax" etc.

[Nigel]

How on earth would owning your own home put you in the poorer end of society.

I think what creedence may mean (though I'm sure they can speak for themselves!) is that if you have a house but no other assets then you are going to lose more than someone with the same amount in assets. This is because either a) those assets will get spent / moved sideways and hidden from the tax man or b) if they take 50% of your assets you still have 50% left and disposable. If they take 50% of your home you're in hock to the private equity firm who owns the other half. You may also owe more in interest and fees for arrangement of the equity release product. And god knows what happens if they own >50%? The perception is that people at the poorer end of the inheritance scale will be in this position i.e. some middle class old dear who has paid off their mortgage over their working life, vs someone with a mansion house, shares, cash etc etc.

Basically if you are in the demographic of passing on stuff but still liable for care costs then the likelihood is that the folk at the poorer end will just have a house worth e.g. £200K. Those at the higher end will be in £1million house with bags of cash. £150K care costs will have a proportionally bigger impact on the former.

What you refer to i.e. the "real" poor end of society won't be liable for care costs at all as they won't have any of these assets.

[IanP]

As I stated earlier in the thread I'm generally in favor of using what would be inherited wealth to assist in paying the costs of longer term care particularly as the impact of an ageing population continues to increase.

However the proposed policy (and you comments) make no attempt to resolve the issue around fairness and winner vs losers in the lottery of old age health.   Normally these sort of uncontrollable risks can be managed via insurance but the market doesn't appear able to help in this case and anyway the UK (sensibly in my opinion) has chosen to generally pool healthcare risk via the state rather than the insurance market.  Wouldn't a inheritance based tax (possible allocated specifically to long term care costs) be a much better way to deal with this?

[gme]

I think the whole proposal is a bit crude hence why i put my stipulations but think the general idea is good.

I am also not suggesting that this replaces inheritance tax, far from it i am all for increasing that as well.

[jfdm]

It seems utterly absurd that you should rely on the government to pay for it all whilst you own assets worth far in excess of these costs; assets that then just get passed on to your next of kin after death with a minimum amount of tax.

All true but each persons circumstances will be different, more care/less care depending on illness.
I might be suddenly struck down in old age by a heart attack and leave behind all my inheritance.
I might develop dementia and leave been 100k, having eaten through any savings/money that remains within the property.
So it isn't fair it becomes a lottery and down to luck.
The telegraph stats about care home costs - it is strange that this article appeared earlier this year. I think that this has been in the pipeline for a while.
The article clearly states that how much this "tax" or cost will largely depended on where you live and the value of your property.
Those with most expensive properties it will affect the least.

As others have mentioned fairer to increase inheritance tax another 5-10% maybe more and then collectively we will have all paid for the care that we all need.
Better to collectively share the burden rather than place in some cases substantial costs on the shoulders of individuals who simply become ill.

[IanP]

I think the whole proposal is a bit crude hence why i put my stipulations but think the general idea is good.

I am also not suggesting that this replaces inheritance tax, far from it i am all for increasing that as well.

Currently inheritance tax only kicks in at £1 million (40% rate) so no suggestion that this would replace it.  Don't have any idea how the numbers work but a low level of inheritance tax of say 10-20% on amounts above say £50,000 could raise a lot of money for long term care - the British seem to get very worked up about 'death tax' but a tax a relative low rate wouldn't destroy peoples inheritance while providing a fair way to share the risk we all have.

[petejh]

What is Labour's policy for funding social care in old age?

[SA Chris]

Currently inheritance tax only kicks in at £1 million (40% rate)

No, £325K

https://www.gov.uk/inheritance-tax/overview

[Johnny Brown]

Always been amazed by how few pay inheritance tax (2.5-7% depending on year). Clearly a) most people never amass that much, and b) as gme said, it's very easy to avoid by those who do.

[IanP]

No, £325K

https://www.gov.uk/inheritance-tax/overview

Apologies, it's all pretty complicated and I'm not an expert.  The £325k is per person and can be passed on to spouse (making 650k).

Conservative plans also include an additional family home allowance which effectively increases the tax free amount up to £1 milliion for a couple, thought this started this year but looks like it is being phased in.

https://www.moneyadviceservice.org.uk/en/articles/a-guide-to-inheritance-tax