Cost of care home places could be 'clawed back from estates people leave to their children'

The proposal is being considered to address the growing number of pensioners who are forced to sell their homes to pay for residential or nursing care

James Kirkup
The Telegraph

The proposal is being considered to address the growing number of pensioners who are forced to sell their homes to pay for residential or nursing care while they are alive.
However, it is likely to increase the number of people who have to sell inherited homes instead of keeping them.
A Green Paper on the reform of care services in England will set out a series of options, including new rules to help more people defer their care fees until the end of their lives. The paper could be published with the Budget on April 22.
A single room in a residential home now costs an average of £25,000 a year, and homes that provide nursing care charge more than £35,000. In the Home Counties, fees frequently exceed £45,000.
Anyone living in England with assets of more than £22,250 has to pay their local council towards the costs of their care.
Under current rules, councils have the power to defer payment for care until after someone's death, but many make only limited use of that power. A fifth of councils did not agree to any deferred payments at all last year and others arranged only a handful of deferrals.
Charities including Age Concern say the recession has further reduced the number of offers to defer payment, as cash-strapped councils are seeking immediate payment for care costs instead of waiting until the care recipient's death.
Phil Hope, the care services minister, told a recent Local Government Association conference on care policy that ministers "would like to see more councils responding positively" to requests for deferred payment.
Around 40 per cent of the 450,000 care home residents in the UK are required to pay towards their own fees because they have built up savings and property over their lives.
According to the House of Commons Library, 45,000 had to sell their houses to pay the fees last year, an increase of 12 per cent in five years.
Gordon Brown last year admitted that "too many people fear the prospect of selling their homes" to fund care and promised to reduce the number who have to do so.
The Green Paper will explore ideas including automatically deferring the fees of people who are wealthy enough to be required to pay for their own care until after their death.
Age Concern however, warned that any move to make more families sell homes to pay for care could be very unpopular.
A spokesman said: "When we talk to both older people and middle-aged people, they hate the idea of paying for their care by selling their homes, and it doesn't make much of a difference to them if it happens when they are alive or after their death."
Expanding the deferral rules would also require central and local governments to find much more money to fund care while waiting to recoup the costs in the future.
The deferral plan will be only one of many options set out in the Green Paper. Almost all are likely to be controversial, and ministers are unlikely to signal a clear preference for action, instead waiting for the reaction from voters, charities and experts.
As an alternative to paying fees after death, councils could take part-ownership of homes under options to make more use of equity-release rules. Many elderly care charities are highly sceptical about equity-release and say it should only be used as a last resort.
The paper is also set to float the possibility of much greater use of private insurance to fund personal care, although some ministers are wary of the idea.
The Daily Telegraph disclosed earlier this year that one option being considered would mean adult is forced to take out private insurance to cover the cost of their care in old age.
One idea, suggested by the International Longevity Centre, a think tank, even combines private insurance with deferred payments.
Under this plan, people reaching retirement age would take out an insurance policy against the future costs of care, the cost of which -- perhaps £15,000 to £20,000 -- would then be taken from their estate after death.
Poorer pensioners' care is entirely funded by the state, but those who have built up assets and savings over their lives are effectively forced into the complex, and bureaucratic and costly system of funding residential care.
Ministers are concerned that the current means-testing system leaves some "self-payers" feeling that they are discriminated, and the Green Paper will try to address that feeling.
A new "universal offer" will guarantee all care recipients and their families, including self-payers, the right to advice and support in finding suitable care.
The Government's Law Commission is also drafting a new single legal framework to clarify the funding of care and recipients' rights to complain about poor standards.
Britain's ageing population is set to push the cost of care sharply upwards in the coming decades. The Department of Health forecasts that by 2028, a quarter of all British adult will be over 65 and the number of people over 85 will have doubled.
The cost of care under the means-tested system will reach £24billion, almost double the current annual spending.

April 2010