Elderly get insurance deal to beat care costs

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The Independent Online

Chief Political Correspondent

A government Green Paper is to be published before Easter to tackle the row over the elderly being forced to sell their homes to get state aid for their long-term care, Peter Lilley, the Secretary of State for Social Security, said yesterday.

The consultation document will include a "partnership scheme" under which the elderly will be allowed to keep more of their assets, providing they take out insurance for long-term care.

Mr Lilley said that under the scheme, if they insured for long-term care costing up to pounds 50,000, they would be allowed to keep assets worth up to pounds 50,000 in addition to their current state allowance of pounds 16,000 on capital, before they would be required to contribute to the cost of their care. The premiums could cost about pounds 10,000 spread over a number of years, he added.

Ministers are hoping the scheme will answer growing unrest among Tory voters at the way in which the elderly are required to sell homes to qualify for state support for their long-term care.

The elderly could insure their long-term care for a fixed amount of care - say pounds 50,000 or two years, Mr Lilley said. "If they stay longer than that and haven't got insurance care after that, then they will be able to protect that amount of assets on top of their pounds 16,000. If they are drawn down to that level, they would get help much earlier than would otherwise be the case."

Some senior Conservatives believe the current rules work against the party's policies for wealth creation and passing it down to the family. However, ministers have been forced to keep limits because of the spiralling cost of coping with people who are living longer.

There are fears that the switch to insurance-based long-term care will be made compulsory. But Mr Lilley said: "If we possibly can, I would like to see us relying on a voluntary system rather than compulsion

"I never say never about anything but I am starting on the presumption that we will do it as a voluntary process."

The Chancellor, Kenneth Clarke, doubled the savings limit from pounds 8,000 in the Budget last year, but many Tory MPswarned it was not enough to defuse the protests they were facing in their constituencies.

Harriet Harman, the Labour health spokeswoman, found evidence in Government documents placed in the Commons library that some elderly people appeared to be under pressure by their homes to leave within a matter of weeks.