Long term care Reform – handle with care.
Long-term care reforms must be built on clarity and sustainability, says Just Retirement. Government white paper proposals need to set out individual’s own responsibilities. Reform of the long-term care system must be both clear and sustainable if the looming crisis over escalating costs is to be avoided.
With the white paper eagerly anticipated along with a progress report on funding, Sue Elliott, head of care solutions at Just Retirement, said the industry was keen to see broad principles outlined to help older people in England plan how best to meet their future care needs.
“Everyone agrees change is necessary and the long term care reform white paper is expected to lay out some important reforms to the social care structure,” she said. “But the funding issue is being addressed in a separate paper, perhaps reflecting a lack of cross-party agreement on whether to accept the funding proposals put forward by the Dilnot Commission nearly a year ago.”
“It would be disappointing if the funding proposals paper fails to send a clear signal about how the system will work and the financial responsibilities that each of us as individuals will need to take on ourselves.”
She said that the top two priorities are clarity and sustainability. “There is so much confusion at present and people feel aggrieved when they discover the state will not provide and they are expected to foot some if not all of the bill for care.”
“There needs to be far better information and signposting towards advisers who have expertise and experience. People need to be incentivised to take out insurance against care costs by ensuring they get credit, rather than penalised, for taking action. These are quick wins which could be in place very quickly.”
Sue Elliott also highlighted two other key points she would like to see addressed.
“The first is a change to tax laws to enable pension assets to purchase long-term care insurance, perhaps in the form of disability-linked annuities that step up the income paid when care is required. This would give providers the confidence to innovate.”
“The second is that it needs to highlight the importance of a partnership between the state and the individuals. At the moment Dilnot is the only game in town – that doesn’t mean other models will not work but any model must recognise that neither the public sector nor private sector can pick up the whole bill without the other’s help.”
“At the moment people are not clear about what happens and by the time they find out they are often left with few choices. At least if they know the state will not provide for them they can start making plans. It is no use the state overpromising because whatever is put in place needs to be suitable to deal with an ageing population for decades to come.”
In the meanwhile, why not download our free guide to asset protection – long term care reform has been on the cards since 1988!