PM Sets Out Tax Increase To Fund Social Care

Prime Minister Boris Johnson has today confirmed a tax increase for millions of British workers as the government seeks to reform social care.

The Prime Minister had claimed he had a “clear plan prepared” to fix the care crisis in 2019 – and six months later won an election promising not to hike income tax, VAT or National Insurance Contributions (NICs).

However he today confirmed NICs will rise 1.25% for both employers and employees in April 2022 in order to raise £12bn a year for both health and care.

That’s expected to cost around £180 a year for a worker on £24,100; £255 for a worker on £30,000; and £715 for a worker on £67,100. Firms will have to contribute too.

From October 2023 no-one should have to pay more than £86,000 for care over their lifetimes.

Alongside the cap, there will be a limit of £20,000 in assets, with those who have less than that not being required to contribute to costs.

Between that and £100,000 in assets people will be asked to pay part toward their care costs.

The Prime Minister said it would be ‘irresponsible’ to pay for the overhaul from borrowing and he had to make ‘difficult’ decision. The PM admitted that he was breaking a manifesto promise not to raise NI, but added: ‘A pandemic was in no-one’s manifesto.’

Senior ministers agreed the contentious increase at their first face-to-face meeting since the summer break.

Nick Sanderson, CEO of Audley commented: “The NHS and social care system is over-stretched – no argument there. We’ve known for a long time there is a desperate need for change and finally it looks like the Government might be making some progress. It has only taken 10 years. An increase to national insurance will bring a welcome cash injection, but additional funding is only one part of the puzzle. For a treasury that is cash strapped in wake of extensive Government spending, it is crazy not to look at the other solutions available. Ones that don’t need a money tree to create change.

“We need to see a systematic shift in thinking which reduces the need for care in the first place. Independence, wellbeing and keeping people out of care homes for as long as possible, if not forever, must be prioritised over the propping up of a broken system. Having people in care homes, and hospitals, is expensive, and no one wants to be there. Start the process earlier. Keep people healthy, for longer, and in their own homes. This will take the pressure off the system.”

Social Care Institute for Excellence Chief Executive, Kathryn Smith, says:

“The extra funding is more than welcome though what is just as important is how it is used. We’ve been calling for a sustained increase in funding to stabilise the system and to meet growing demand. The funding is desperately needed and must be ring-fenced to social care. And then it will be up to all of us in the sector to work to maximise the best use of this funding. A fully transformed social care system needs to be personalised for people, using their assets rather than asking what is wrong with them. It needs to be more integrated with health; and regularly adapting to innovation to reach more people and extend the workforce. And it must put people who draw on services at its heart so that they are central to the decisions made about them. We call that co-production. In turn that will attract more people to the social care workforce, so that people who draw on services have much better experiences and outcomes”.

 

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