Well-off elderly could lose benefits including winter fuel allowance in care shake-up

Wealthy pensioners could lose their winter fuel payments and free TV licences to help raise money for long-term elderly care, a government adviser said yesterday.

Lord Warner, who sat on last year’s inquiry into the funding of social care, added that ministers should consider a new ‘granny tax’ that would involve scrapping older people’s exemption from paying National Insurance.

The former Labour minister also suggested deducting money from people’s estates after death to pay for the long-term care they received in old age.

Lord Warner, who was a member of the Dilnot Commission, has been asked by Health Secretary Andrew Lansley to come up with a fair funding system for long-term care.

At present, tens of thousands end up having to sell their homes to pay care-home fees – denying their children an inheritance.

The Dilnot Commission suggested a cap of £35,000 on the amount that individuals can be charged for care – but the Treasury is understood to have baulked at the plan’s £1.7billion cost.

Whitehall admitted yesterday that a long-promised White Paper on social care could be months away.

Lord Warner told the BBC’s Today programme that means-testing benefits that are currently universal, such as winter fuel payments, was one of several options for funding long-term care.
‘We were very clear in the Dilnot Commission that you had to expect the generation who are going to benefit from this to pay more towards the costs of their care,’ he said.

‘You could actually remove the exemption from paying National Insurance for people who work after retirement age. That’s one way of getting a bit of money.’

A similar ‘granny tax’ introduced in this year’s Budget, which changed pensioners’ tax allowances to remove a tax break introduced by Winston Churchill, was roundly condemned.

Lord Warner also suggested that the proposed cap on care fees for individuals could be raised to £50,000, guaranteeing care providers more money up front and reducing running costs.

‘We also proposed in the [Dilnot] report [that] you should look at collecting the money after death,’ he added.

‘You could actually let people build up a cost which they would pay in effect like student loans – they would pay interest on it and you collect it from the estate. You could put a levy on inheritance tax.

‘There are other ways of doing this if everybody is so concerned about avoiding universalism on winter fuel allowance, bus passes and so on.’

Ros Altmann, director general of Saga, said: ‘If you start means-testing pensions and benefits, all you will do is put people off saving. We need less means-testing, not more. There is a solution – the Dilnot report – but the Government does not have the courage to deal with it.’

A spokesman for Downing Street refused to say whether a White Paper on adult social care would be published before MPs break next month for their summer recess, saying only that it would arrive ‘within the coming months’.


Sourced from the Daily Mail, 20th June 2012.