A radical new solution to the growing crisis in care funding has been put forward by a leading charity, ahead of the Government’s green paper this spring on the future funding of care and support.

Counsel and Care, which advises older people on how to access care and funding, says that bold new measures are urgently needed as over 60,000 older people are now selling their own home each year in order to pay for a place in a care home. Even before the current financial crisis, that number was expected to increase in the years ahead as property ownership rises amongst younger age groups.

Throughout the UK, councils are already becoming ever more stringent on what care and support they are prepared to pay for, and what they expect the recipient to fund.

With Government resources becoming increasingly stretched, the situation can only deteriorate. Counsel and Care believe that the financial ‘load’ should be shared more fairly and that families should not be pressurised into selling homes in a ‘buyer’s market’.

Stephen Burke, Chief Executive of Counsel and Care (pictured), says: 

“The growing care funding gap needs to be addressed urgently. We believe that better care could be funded by introducing a ‘care duty’ 

on estates – along with better use of existing funding for care, health and housing; more support for carers; and more help to older people and their families to make the best use of their own resources.

“A care duty set at just 2.5% on estates valued between £25,000 and £312,000 could, for example, raise at least £1.7 billion a year to bridge the care funding gap. A care duty of 4.25% could generate almost £3 billion.”

The collapse of the property market has meant many older people and their families are faced with even bigger problems paying for a care home place. If their local authority won’t help with a loan through a deferred payment, then older people have to get a loan, rack up debts with the care home or sell their home below market prices. Growing numbers of enquiries to Counsel and Care’s advice service involve problems paying for care home fees.

“Families want the right care and the right deal,” says Mr Burke. “An increasing number of older people and their families are faced with the prospect of huge bills which have to be paid by selling their home. This has been made even harder by the current economic crisis

“It would be much fairer if better care was funded through a care duty on people’s estates, with a small percentage paying for care.

Rather than losing the family home, people would pay a bit more through inheritance tax. The care duty could top up current public spending or be ring-fenced and used as part of a new social insurance scheme to pay for care. This proposal makes sense because we already have a system for collection, and it would keep track with demographic changes and increased personal wealth.

“The green paper this spring is a once in a lifetime opportunity to create a new care system that meets the needs of this generation and future generations of older people. The downturn can’t be used as an excuse to delay action any longer.”