Labour offers 'staircase' for care costs

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Indy Politics
The Labour Party intends to ask housing associations and local councils to help old people stay in their homes when they need nursing care, by providing the funds to pay for care in return for a stake in their house.

The problem of the elderly having to sell their homes to pay for long- term care is a sensitive political issue, as the National Health Service tightens its rules and refuses to keep the infirm in hospitals. Many old people - and their children who expect to inherit houses - have been outraged to discover that such care is not covered by a lifetime's tax and National Insurance contributions.

Proposals in a discussion document to be published in the next few weeks by Nick Raynsford, Labour's housing spokesman, are designed to postpone for as long as possible the point when the elderly have to move into residential care.

Labour's document is expected to propose a system of "flexible tenure". As well as allowing people to move gradually from renting to home ownership, as they can afford it, it will provide a "staircase" to allow people to move the other way - thus releasing funds locked up in the value of their house. These could pay for low-level and relatively cheap services, such as help around the house and with shopping.

Private sector "equity release" schemes already allow home-owners to cash in some of the value in their houses, but have a poor reputation. But neither Labour nor the Government has yet made any decisions about whether people should be helped with the cost of residential care.

Nursing home places cost up to pounds 20,000 a year and, once old people's savings fall below pounds 3,000, local council social services departments require them to sell their homes to meet the fees, before they become eligible for full means-tested help.

Social services directors last month argued for a system of "social insurance", saying that private insurance would fail to cover large numbers of people. The Prime Minister's policy unit is working on a number of schemes, including putting houses in trust and disregarding their capital value for the means test, and tax breaks for saving specifically for such care. But the Treasury opposes the schemes on grounds of cost.

This week's Independent/Harris poll found that 81 per cent think long- term care for the elderly should be "paid for by society as a whole, through some form of taxation".

NHS special, page 6