'Target winter fuel benefit to pay for elderly care'

 

MP Paul Burstow says savings could be used to help people with "horrendous care bills"

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Winter fuel payments should be means-tested to help pay for care of the elderly, a former minister has said.

A report by Lib Dem MP Paul Burstow said targeting the allowance would help pay for a fairer social care system.

The report said it could fund most of the £1.7bn cost of implementing reforms of elderly care in England.

While David Cameron said universal benefits for pensioners would be protected the BBC understands ministers are poised to back a cap on care costs.

Last year the Dilnot Commission recommended that the cap on the amount individuals have to pay towards their social care be set at £35,000 over a lifetime.

The commission, set up by the government, argued that such a move would protect people from catastrophic care costs that result in them having to sell their homes.

At the time, ministers said a cap was the "right basis" for change but they needed to look at other cheaper options.

The BBC's chief political correspondent Norman Smith said there were growing signs that a commitment to a cap could be included in the coalition's mid-term review expected to be published shortly.

Start Quote

We appreciate that the country is facing difficult financial times , but we must be careful that the wider implications for older people of any potential source of funding are fully considered”

End Quote Michelle Mitchell Age UK

As things stand, older people in England have to pay for their care costs if they have assets of more than around £23,250. Similar systems exist in Wales and Northern Ireland, but in Scotland personal care is provided free.

Under the proposals from Mr Burstow and the Centre Forum, the cap on the amount people should pay towards social care costs would be set at £60,000 but the amount of assets people could hold would rise to £100,000.

They said winter fuel allowance should be limited to those receiving pension credit.

Pension credit takes into account savings and income, and only the poorest retired people qualify to receive it.

The move would save £1.5bn a year and mean about three-quarters of current recipients would lose the allowance, which is worth between £200 and £300 per household, Mr Burstow's report explains.

The report also proposed ending the relief on capital gains tax at death. This would raise another £600m a year, it said.

A trade-off

Mr Burstow, the former care services minister, said: "Social care isn't free, but it could be a lot fairer for those who have worked hard all their lives.

"By concentrating the winter fuel payment on those eligible for pension credit, we can pay for a cap on care costs."

He said there were 100,000 pensioners with incomes of more than £100,000 a year and questioned whether it was "right" to continue to pay them winter fuel allowance as many of them admitted to using the money for other things.

David Cameron: "I made a very clear promise at the election which was that we would keep the payment"

Michelle Mitchell, of Age UK, said introducing a cap on social care costs would "lift one of the great fears of becoming older".

But she urged caution over taking away other benefits from the elderly.

"We appreciate that the country is facing difficult financial times, but we must be careful that the wider implications for older people of any potential source of funding are fully considered."

'Best model'

The suggestion that winter fuel payments should be targeted comes amid rising controversy about the allowance and amid the continuing debate over how to pay for long-term care for the elderly.

Any commitment to a cap would be significant, Norman Smith added, as previous governments had shied away from such a move due to the huge cost implications involved.

However, he said no details of the level at which a cap would be set, how it would be paid for and when it would come into effect were likely to be given.

Earlier on Thursday, Health Secretary Jeremy Hunt said the UK had a "long way to go" if it was to be regarded as one of the best places in Europe to grow old.

"There is no doubt capping costs - the principle recommended by Dilnot - is the best model. The key question is how to fund it sensibly given the current deficit.

"We are looking at how to achieve this, along with taking action to ensure people do not have to sell their homes to pay for care."

 

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  • rate this
    -13

    Comment number 761.

    The winter fuel allowance and "free" pensioner bus passes make very little sense and should be revoked. The money saved should go into the basic state, where it would be taxed as income, with high earners paying 40% and low earners nothing!

  • rate this
    +28

    Comment number 262.

    If you have an income of over £100,000 then you don't really need the WFA. We need to protect the elderly and vunerable in our society but wealthy pensioners should not expect to receive benefits such as the WFA and the saving can be passed on to the more needy.

  • rate this
    +31

    Comment number 148.

    This benefit is exactly that to millions of pensioners - the benefit of keeping warm and not worrying themselves stupid about putting the heating on. To save money now why isn't there an opt out system? Simple form on HMRC website...

  • rate this
    +41

    Comment number 96.

    If it was considered as income and taxed accordingly, that would appear fairer. The lower incomes would keep it all and higher ones return at least some of it.

  • rate this
    -30

    Comment number 95.

    I find it crazy that the typical 'baby-boomers' who have experienced consistent property value rises, jobs for life, generous pension schemes that actually paid out the predicted funds, NHS care that they hardly paid into and retirement at 60 - 65 should automatically get winter fuel allowance. Make it means tested now!

 

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