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July 13, 2012 / politicsbitesize

Loans for OAPs

The long awaited government Care and Support White Paper, which was published on Wednesday 11th July 2012, sets out a number of proposed reforms to social care for the elderly. But charities and health organisations are furious that a decision to implement the new reforms will be postponed until next year’s spending review.

The proposals are, in principle, in keeping with the changes to adult social care funding as set out in Andrew Dilnot’s independent report, which was commissioned by the government in 2011. These included placing a cap of £35,000 on an individual’s contributions toward the cost of going into a care home or having home visits before they receive help from the state.

At present people with savings of more than £23,250 who require help in their home must pay the full cost of that care, while those with less than £14,250 get all their care paid for. Those who need to go into residential care are means tested in the same way but their assets will be taken into consideration. What the Dilnot report suggested was a rise in the amount of assets that people are allowed to hold before they are made to contribute.

Andrew Lansley, the health secretary, suggested on Wednesday that the proposed cap should be set at £100,000. This means that those in receipt of care would have to contribute four times more than they are already asked to do and three times more than recommended by Dilnot.

What the government’s White Paper also sets out is plans for those pensioners who require residential care to be able to take out a loan in order to pay fees. As many as 40,000 old people sell their homes annually in order to cover the costs of residential health care. Andrew Lansley’s proposals would mean that they wouldn’t be required to sell their homes immediately but could defer the sale until after their death. The loans would come from the local council and be paid back when the individual dies and after the house is sold. Naturally, these loans would accrue interest.

Dot Gibson of The National Pensioner’s Convention said: ‘Under these new proposals people will still end up having to pay for care by selling their homes. The only difference will be that it will be done after they’ve died.‘ Another issue at the heart of these proposals is that they reinforce the culture of debt, which was partly responsible for the financial crisis we are still facing. It would be a shame to get to the end of your life and all you have to leave is a mountain of debt. More thought needs to be put into these proposals before they become part of a future social care bill.


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