Long-term care: is a new tax on its way?

Proposals for a new tax to pay for reforms to the social care system


The 2019 Conservative Party Manifesto committed to urgently seek a cross-party consensus in order to bring forward the necessary proposal and legislation for long-term reform.

On Friday, the Times newspaper reported (citing a source) that Boris Johnson is backing proposals for a new tax to pay for reforms to Britain’s social care system under plans that could be agreed within weeks.

Downing Street was “comfortable with some sort of tax” to fund universal social care, the newspaper said.

The prime minister, Health Secretary Sajid Javid and Finance Minister Rishi Sunak are understood to be pushing to agree the terms of a package the Telegraph reported separately. The announcement is expected to include a cap on the amount people pay towards their own care.

Of course, a cap is already set out in legislation which was due to come into force back in April 2016.

The Care Act 2014 included measures for the reform of social care based on the recommendations made in 2011 by the Dilnot Commission. The measures, which were aimed at reducing the impact of care costs on accumulated wealth, include a cap on the total amount that a person will have to pay towards their own care as well as a substantially increased higher capital limit.

Part 1 of the Act, which is now in force, introduced the first of the reforms – a universal deferred payment arrangement and new national criteria to determine eligibility for care – in April 2015.

A £72,000 cap on care costs and increased higher capital limit of £118,000 were due to be introduced under Part 2 of the Act which was originally due to come into force in April 2016, but which was further delayed until publication of the social care Green Paper, which was expected December 2018 having been delayed from Summer 2017!

It will be interesting to see what comes of this latest report, and, as always, we will keep you informed of any changes.


Credit – Techlink

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