JRF study proposes five reforms to provide fairer funding for long-term care
A new Joseph Rowntree Foundation report spells out five affordable reforms to start funding long-term care more fairly, adequately and coherently. The report argues that long-term care funding will eventually need a major overhaul with more public money, but its costed reform options demonstrate how improvements could begin immediately.
Paying for long term-care, based on a three-year programme, reviewed the evidence of an inequitable and incoherent system that is financially unsustainable. A leading team of experts and stakeholders were brought together by the JRF to commission analysis and international comparisons as well as help formulate approaches to reforming the present funding system.
Proposing practical solutions for the immediate future, the report builds on earlier JRF research into long-term care. It also confirms the findings of the recent Wanless Review, which demonstrated the need for fundamental reforms and more resources.
The five suggested reforms that could be set in course now are:
- Pilot a voluntary Equity Release Scheme for home-based care: this would enable home-owners to access capital tied up in their homes. Cost: about £100 million a year, depending on take-up but the long-term costs would only be a fraction of this as loans are repaid.
- Double the capital threshold for care home support: this would prevent home-owners from draining so much of the proceeds from their properties before they could access state support. Cost: about £250-300 million a year.
- Double the personal expenses allowance for people supported by local authorities in care homes: this would help those receiving just £19 a week to afford a few more modest purchases. Cost: £250 million a year.
- Charge all care home residents for non-care costs and redistribute the proceeds: this would raise around £180million to pay for other improvements.
- Review the basis of Attendance Allowance: this would help distribute available resources more fairly.
Evidence from another JRF publication, Testing consumer views on paying for long-term care was incorporated into the report. This public opinion exercise examined the views of 59 participants aged 26-90 across eight diverse groups. It found that for many people the best strategy for funding their own long-term care appeared to be disposing of their assets to ensure they qualify for state support.
Sir Christopher Kelly, former Permanent Secretary at the Department of Health, who chaired the group advising the Foundation on long-term care funding, said,
“With its ageing population, the UK urgently needs a clear, effective and fairer system for financing long-term care. If we continue with this already overstretched, inequitable and incomprehensible system of funding while demand continues to rise, there will be serious costs for the dignity and wellbeing of older people. In the longer term, a comprehensive overhaul is needed but immediate changes could address the most problematic elements of the current system. We are hoping the Government will use the forthcoming Comprehensive Spending Review to tackle these key issues.”
For the longer term, JRF suggests considering a completely new system in which the state pays for most care costs and each user makes a contribution set as a fixed proportion of the total. For example, if the state paid 80% and individuals were charged 20%, there would be little need for means testing. This would cost about £2 billion. In the meantime, the five proposed modestly costed reforms would readily create a sustainable system to act as a foundation to the more fundamental reforms required on a longer term basis. As the report indicates, several elements of the present system could be improved without incurring excessive extra costs.
