How to pay for social care
Discussion
The government is reportedly looking at increasing the rate of national insurance by 1%
https://www.theguardian.com/society/2021/jul/19/mi...
or not
https://www.thetimes.co.uk/article/keir-starmer-at...
meanwhile we've got journalists in the Guardian calling for a massive increase in inheritance tax to cover these costs:
https://www.theguardian.com/commentisfree/2021/jul...
How would you fund it? It's a problem that is only going to get bigger and the risks of things like Alzheimers are a bit of a lottery.
https://www.theguardian.com/society/2021/jul/19/mi...
or not
https://www.thetimes.co.uk/article/keir-starmer-at...
meanwhile we've got journalists in the Guardian calling for a massive increase in inheritance tax to cover these costs:
https://www.theguardian.com/commentisfree/2021/jul...
How would you fund it? It's a problem that is only going to get bigger and the risks of things like Alzheimers are a bit of a lottery.
s1962a said:
I would be in favour of a national insurance increase if that money was ring fenced for social care
The problem is that although that specific part of the funding would be ringfenced the rest of the funding wouldn't be. They could reduce the 'other' part of the budget without technically breaking their word. You just know they'll do that with any ringfenced (hypothetical) additional tax.PeteinSQ said:
The government is reportedly looking at increasing the rate of national insurance by 1%
https://www.theguardian.com/society/2021/jul/19/mi...
or not
https://www.thetimes.co.uk/article/keir-starmer-at...
meanwhile we've got journalists in the Guardian calling for a massive increase in inheritance tax to cover these costs:
https://www.theguardian.com/commentisfree/2021/jul...
How would you fund it? It's a problem that is only going to get bigger and the risks of things like Alzheimers are a bit of a lottery.
I would say Inheritance tax rather than general (hypothecated) tax.https://www.theguardian.com/society/2021/jul/19/mi...
or not
https://www.thetimes.co.uk/article/keir-starmer-at...
meanwhile we've got journalists in the Guardian calling for a massive increase in inheritance tax to cover these costs:
https://www.theguardian.com/commentisfree/2021/jul...
How would you fund it? It's a problem that is only going to get bigger and the risks of things like Alzheimers are a bit of a lottery.
It seems rather pointless having an IHT hike to pay for it given that in reality these costs are coming out the estate in any case.
There is in fact a vast pot of wealth that can amply cover social care costs hundreds of times over, the accumulated assets of those very elderly who may need social care before end of life. The reason why this is seen as politically unpalatable is that many think they have a right to inherit the estate free of any costs for end of life care.
It would be extremely regressive to increase either NI or Income tax in order to preserve inherited wealth.
There is in fact a vast pot of wealth that can amply cover social care costs hundreds of times over, the accumulated assets of those very elderly who may need social care before end of life. The reason why this is seen as politically unpalatable is that many think they have a right to inherit the estate free of any costs for end of life care.
It would be extremely regressive to increase either NI or Income tax in order to preserve inherited wealth.
I agree that using income tax or NI would be regressive. I'd have the recipient of the care pay for it in most cases, and if they haven't the cash savings, the state should take the cost from their estate after death.
However, this can be unpredictable and people want to be sure they can leave something to their children if they need care for a long period, so I'd like to see a state-sponsored insurance scheme where you optionally pay amounts whilst you are working up to a maximum amount (maybe with tax incentives), and depending on the total amount paid in in your lifetime, you get the cost of care paid for (or a percentage if you haven't paid the full amount).
However, this can be unpredictable and people want to be sure they can leave something to their children if they need care for a long period, so I'd like to see a state-sponsored insurance scheme where you optionally pay amounts whilst you are working up to a maximum amount (maybe with tax incentives), and depending on the total amount paid in in your lifetime, you get the cost of care paid for (or a percentage if you haven't paid the full amount).
It's a tricky issue. If you have two people who have earned essentially the same during their lifetimes yet one has spunked it all on fast cars, fast women and slow horses and the other has saved a couple of hundred grand to pass on to their kids the spendthrift still gets looked after at state expense. Is that fair?
AJL308 said:
It's a tricky issue. If you have two people who have earned essentially the same during their lifetimes yet one has spunked it all on fast cars, fast women and slow horses and the other has saved a couple of hundred grand to pass on to their kids the spendthrift still gets looked after at state expense. Is that fair?
On the flip side, one person gets to cruise through life and inherit several hundreds of thousands of their parents house prices increases, whilst another is lumbered with high taxes on income and the propped up housing market to facilitate that, because they didn’t have the foresight to be born to the right parents.Everyone wants someone else to pay but almost everyone will want to utilise this (very expensive) benefit.
An increase in NI penalises those in work (again) whilst those that choose not to work get of scott free. Also, as has been noted, it isn't very progressive (although I'm no fan of that term).
IHT is a double (or even triple) tax and also only paid by a minority. It also penalises those who save, whilst folks that instead choose not to won't be paying towards their care. A significant hike would likely cause avoidance behaviours (I saw someone recommend 98% IHT...if that were the case I think most very wealthy folks would leave long before it became and issue, and if they couldn't they might as well squander it on a few crazy weeks in Las Vegas before dementia strikes, rather than see their estate grabbed by the state).
Consequently my view is that, painful as it will be, we ought to increase something like VAT. It's a tax everyone pays, it raises a lot, it's hard to avoid, the rich tend to pay more (as they buy more expensive things).
In practise, I don't think the public want to face the reality that THEY will have to pay for THEIR care; there's no magic money tree. The can will get kicked down the road.
An increase in NI penalises those in work (again) whilst those that choose not to work get of scott free. Also, as has been noted, it isn't very progressive (although I'm no fan of that term).
IHT is a double (or even triple) tax and also only paid by a minority. It also penalises those who save, whilst folks that instead choose not to won't be paying towards their care. A significant hike would likely cause avoidance behaviours (I saw someone recommend 98% IHT...if that were the case I think most very wealthy folks would leave long before it became and issue, and if they couldn't they might as well squander it on a few crazy weeks in Las Vegas before dementia strikes, rather than see their estate grabbed by the state).
Consequently my view is that, painful as it will be, we ought to increase something like VAT. It's a tax everyone pays, it raises a lot, it's hard to avoid, the rich tend to pay more (as they buy more expensive things).
In practise, I don't think the public want to face the reality that THEY will have to pay for THEIR care; there's no magic money tree. The can will get kicked down the road.
chemistry said:
Everyone wants someone else to pay but almost everyone will want to utilise this (very expensive) benefit.
An increase in NI penalises those in work (again) whilst those that choose not to work get of scott free. Also, as has been noted, it isn't very progressive (although I'm no fan of that term).
IHT is a double (or even triple) tax and also only paid by a minority. It also penalises those who save, whilst folks that instead choose not to won't be paying towards their care. A significant hike would likely cause avoidance behaviours (I saw someone recommend 98% IHT...if that were the case I think most very wealthy folks would leave long before it became and issue, and if they couldn't they might as well squander it on a few crazy weeks in Las Vegas before dementia strikes, rather than see their estate grabbed by the state).
Consequently my view is that, painful as it will be, we ought to increase something like VAT. It's a tax everyone pays, it raises a lot, it's hard to avoid, the rich tend to pay more (as they buy more expensive things).
In practise, I don't think the public want to face the reality that THEY will have to pay for THEIR care; there's no magic money tree. The can will get kicked down the road.
VAT is the obvious one, to be fair. I really wouldn't object to certain things carrying a higher rate of VAT. If we are objecting to the wealthy hoarding money then tax luxury goods at a higher rate. Is there going to be a real pushback against 22% VAT on an 85" TV as opposed to 20% on a 55" one, for instance? It seems far fairer than those who have spent all their income receiving essentially the same care as those who are paying privately for it. An increase in NI penalises those in work (again) whilst those that choose not to work get of scott free. Also, as has been noted, it isn't very progressive (although I'm no fan of that term).
IHT is a double (or even triple) tax and also only paid by a minority. It also penalises those who save, whilst folks that instead choose not to won't be paying towards their care. A significant hike would likely cause avoidance behaviours (I saw someone recommend 98% IHT...if that were the case I think most very wealthy folks would leave long before it became and issue, and if they couldn't they might as well squander it on a few crazy weeks in Las Vegas before dementia strikes, rather than see their estate grabbed by the state).
Consequently my view is that, painful as it will be, we ought to increase something like VAT. It's a tax everyone pays, it raises a lot, it's hard to avoid, the rich tend to pay more (as they buy more expensive things).
In practise, I don't think the public want to face the reality that THEY will have to pay for THEIR care; there's no magic money tree. The can will get kicked down the road.
NerveAgent said:
AJL308 said:
It's a tricky issue. If you have two people who have earned essentially the same during their lifetimes yet one has spunked it all on fast cars, fast women and slow horses and the other has saved a couple of hundred grand to pass on to their kids the spendthrift still gets looked after at state expense. Is that fair?
On the flip side, one person gets to cruise through life and inherit several hundreds of thousands of their parents house prices increases, whilst another is lumbered with high taxes on income and the propped up housing market to facilitate that, because they didn’t have the foresight to be born to the right parents.AJL308 said:
VAT is the obvious one, to be fair. I really wouldn't object to certain things carrying a higher rate of VAT. If we are objecting to the wealthy hoarding money then tax luxury goods at a higher rate. Is there going to be a real pushback against 22% VAT on an 85" TV as opposed to 20% on a 55" one, for instance? It seems far fairer than those who have spent all their income receiving essentially the same care as those who are paying privately for it.
I agree, a basic rate VAT and then an enhanced one for luxury goods would seem fair and progressive.Hard to see how folks could complain; if there were objections to the higher rate then one could point out that nobody actually needs a Rolex etc. so in a sense it's an 'optional' tax, similar to the variable VED bands we have currently (with the premium car tax for those over £40k); nobody has to pay it unless they want 'luxury' goods.
Fundamentally, unless everyone contributes towards the scheme (albeit to different degrees based on ability to pay) then it's never going to be 'fair'. VAT seems to be as good a route as any to achieving this.
NerveAgent said:
On the flip side, one person gets to cruise through life and inherit several hundreds of thousands of their parents house prices increases, whilst another is lumbered with high taxes on income and the propped up housing market to facilitate that, because they didn’t have the foresight to be born to the right parents.
I suspect that to solve all these issues, some sacred cows will need to be slaughtered. 1) You solve the saving/not-saving by having different tiers. Base tier keeps you alive, but nothing else. You want to end up in a dormitory having your arsed wiped by YTS trainees - then spend all your cash on coke and hookers. People who’ve put money aside, get a more pleasant experience.
2) People with assets should pay using those assets. It should be an attractive option for them - gets them out of the base tier. At the moment there is no difference between someone who has been financially cautious and someone who has pissed it up the wall - which leads to the whole inheritance argument. People are justifiably annoyed to lose an inheritance when they see zero benefit to their parent.
3) There needs to be a proper discussion about end of life. For the avoidance of doubt, when I don’t know who I am, I’d appreciate being offed with an overdose of something. Every experience I’ve had of families with a demented relative is that the experience is horrific for all of them. The demented relative has no bloody clue who they are, and the living relatives visit something that is the body of their parent, but not actually their parent. Yet the medical profession is determined to keep them alive at any (considerable) cost. Covid and care homes was the best thing that happened to several people I know.
This is a thorny issue and one where there are no easy answers.
My personal view it should be out of the coffers of the nation and the same as with the NHS if you wish to you can chose better care privately.
The problem by continuing with making the recipient pay is as others have said you would make more people say "sod It" and make no provision or make sure their funds are not able to be touched which makes the situation worse again.
I understand those who say inheritance tax should be used, however people have worked, paid taxes and then we expect them to pay on their death, it seems unfair to penalise frugality and reward profligacy.
What is fairer is that everyone pays tax and those who can pay more, do so as do companies who trade here.
Both my parents needed care, I paid every penny and did not begrudge that and when the home was sold I split the money it sold for with my two siblings. It hurt my Father that his friends who were also miners, got everything free because they had spent every penny they had and that unfairness is at the heart of trying to make changes.
One issue that might make a difference is they way that the NHS and councils are being forced to co operate in care for the elderly so hospitals are not forced to keep old people in a bed as councils have no intention of using their money to fund none medical care if they can get away with it.
My personal view it should be out of the coffers of the nation and the same as with the NHS if you wish to you can chose better care privately.
The problem by continuing with making the recipient pay is as others have said you would make more people say "sod It" and make no provision or make sure their funds are not able to be touched which makes the situation worse again.
I understand those who say inheritance tax should be used, however people have worked, paid taxes and then we expect them to pay on their death, it seems unfair to penalise frugality and reward profligacy.
What is fairer is that everyone pays tax and those who can pay more, do so as do companies who trade here.
Both my parents needed care, I paid every penny and did not begrudge that and when the home was sold I split the money it sold for with my two siblings. It hurt my Father that his friends who were also miners, got everything free because they had spent every penny they had and that unfairness is at the heart of trying to make changes.
One issue that might make a difference is they way that the NHS and councils are being forced to co operate in care for the elderly so hospitals are not forced to keep old people in a bed as councils have no intention of using their money to fund none medical care if they can get away with it.
One thing that needs looking at is assisted dying.
When my time comes, if faced with the prospect of high bills, not passing anything on to my kids, and a world of pain and inactivity, I would like to think I would have the courage to face assisted dying with some degree of contentment. That fact that situation would put my family in legal problems seems to me to be inhumane and outdated.
When my time comes, if faced with the prospect of high bills, not passing anything on to my kids, and a world of pain and inactivity, I would like to think I would have the courage to face assisted dying with some degree of contentment. That fact that situation would put my family in legal problems seems to me to be inhumane and outdated.
spaximus said:
My personal view it should be out of the coffers of the nation and the same as with the NHS if you wish to you can chose better care privately.
The problem with this is that some folks choose to pay little/nothing into those coffers, passing the burden onto those that do contribute. More importantly, how those coffers are filled with the extra money that will be needed to pay for social care is the question.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff