Tory ‘Dementia Tax’ Forces Insurance Schemes And Robs Families Of Their Loved Ones Homes

As is always the way with our biased and Tory owned TV and Print media, the Tory’s manifesto is not being scrutinised for what it really is – a return to the 1870s!

One of the worst elements within the classic Tory attack on the poor and elderly, is their new idea of stealing the inheritance of their families, which is being sold as a way of stopping elderly and infirm people from having to sell their homes – whilst they are alive!

Once dead, this is the true situation their families will find themselves in writes Graham Wilson, CWU’s North West Region Retired Members Committee chair, in an email to the Union’s pensioners:

“Social Care will cost more whether it’s residential or domiciliary if you’re unfortunate enough to need it. And they’ll snatch all but £100,000 of your home when you die.

But that’s not a death tax they tell us.

So, if you have to take equity from your home to pay your care costs the mortgage company will charge interest on the loan.”

Quoting Barbara Keeley, shadow minister for social care, he adds:

“In their last manifesto, they promised a cap on care costs. But they broke their promise, letting older and vulnerable people down.”

Why is it right that if you get cancer the NHS look after you but if you get dementia you’re the responsibility of the local authority?”

The Tory think-tank, The Bow Group Chairperson Ben-Harris Quinney totally condemned his own party manifesto by saying this about the ‘dementia tax’:

“These proposals will mean that the majority of property-owning citizens could be transferring the bulk of their assets to the Government upon death, for care they have already paid a lifetime of taxes to receive.

It is a tax on death and on inheritance. It will mean that in the end, the government will have taken the lions share of a lifetime earnings in taxes.

If enacted, it is likely to represent the biggest stealth tax in history and when people understand that they will be leaving most of their estate to the Government, rather than their families, the Conservative Party will experience a dramatic loss of support”.

Key Points:

*c.75% of over 65s in the UK are home owners

*The average value of a property in the UK is £280,000

*Conservatives committed in 2015 to cap state elderly care at £72,000 in total

*The Dilnot Commission into elderly recommended a cap of £35,000 in total

*The average cost for residential care is £29,270 per annum

*The average cost for nursing care is £39,300 per annum

*The new proposals mean there will be an unlimited maximum charge for elderly care

*The new proposals open up each citizens primary property to seizure upon death to cover care costs, even if care was received at the primary property

*With increased life expectancy it is anticipated that at least 70% of people will require some form of elderly care
(Source: Age UK)

Even further the Bow Group Health Research Fellow Dr Jon Stanley said on their website on 18th May after the launch of the Tory manifesto:

“…In 2016 we voted for a bonfire of directives from Europe, but we will see a bonfire of home ownership before either unless the government rapidly reverses it’s proposed formula for funding long term care.

…The current policy throws everything done over the last 7 year​s in the bin in return for a cosmetic increase in the asset base to 100k.

What this amounts to is an inheritance tax of 100% on a £100K threshold if you happen to need complex care. At current rates care costs could reduce an asset base of £300k to £100k in 4 years or less.

This policy removes the incentive to accumulate wealth for the family, provides no peace of mind and does nothing to ban councils being cross subsidised by self funders who pay higher fees.”

Social media is going mad over this new tax on the elderly and infirm. Phil Lewis, a 92 year old pensioner posted this quote from a city worker on his Face Book account:

“The Conservatives will attempt to soften the blow by promising that pensioners will not have to sell their homes to pay for their care costs while they or a surviving partner are alive.

Instead, ‘products will be available’ allowing the elderly to pay by extracting equity from their homes, which will be recovered at a later date when they die or sell their residence.”

As was reported by the Mirror in May of 2016, the Health Secretary Jeremy Hunt in a hearing at Westminster, eluded to this policy 12 months ago. The newspaper report stated:

In another exchange today, Mr Hunt revealed one reason for shelving the Tories’ £72,000 ‘care cap’ until 2020 was because a private insurance market couldn’t be created to go with it.

The Health Secretary said the policy was “designed” to encourage life insurance firms to create policies to cover the cost up to £72,000.

But he said: “We saw no signs of that insurance market being developed so we need to rethink.”

Although he insisted the cap was still government policy he said: “I think the long term funding over the next few decades of our own social care is something we need to give a lot more thought to as a society.

“I think we decided after the war that it was incredibly important for us to be a society where the norm was for people to save for their pensions.”

Phil Lewis also added this to his FB timeline, ,although there is no source attributed to it:

” People need to read the small print associated with this because its a lot nastier than it looks. I work in the City.

The insurance industry was approached by the Government several months ago with the aim of creating a new market for a new product.

This arrangement is a culmination of those discussions. You wont have to sell your house PROVIDED that you purchase an insurance product to cover your social care. The “premiums” would be recovered from the equity after the house has been sold and the Insurance company will have a lien on the house and can force a sale if it wants to.

So your offspring cant keep it on the market for long in order to get the best price.

The real kicker in this is that in order to encourage the industry to market these products the government guaranteed that there would be no cap on the premiums.
This was in some ways “attonement” for Osborne’s destruction of the highly lucrative annuities market.

This means that the premiums could be up to (and including) the entire remaining equity in the property after the government has taken its cut. Companies will be falling over themselves to get their snouts in this trough.

In short your offspring and relatives could get absolutely nothing from your estate.
If you buy one of these products you need to read the small print very very carefully indeed because there will be some real dogs on the market.

I suspect that this is another financial scandal waiting to happen, but by the time it does May will be long gone.”

In fact the above view was generally supported by a previous Coalition minister in the form of the Libdem’s when he said that people will have to take on insurance in order to pay for their healthcare after their death.

Finally even Sir Andrew Dilnot has condemned the Tory plan:

“There’s nothing you can do to protect yourself against care costs, you can’t insure it because the private sector won’t insure it, and by refusing to implement the cap that Conservatives are now saying they’re not going to provide social insurance for it.”

Concluding his comments he said:

“So people will be left helpless knowing that what will happen is if they’re unlucky enough to suffer the need for care costs, they’ll be entirely on their own until they’re down to the last £100,000, all of their wealth including their house,” he said.

Source: Daily Mirror / Phil Lewis / The Bow Group / Graham Wilson / The Guardian

Posted: 1st January 2017

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