Using the Cass approach a person’s savings, other assets and income would be treated on an equivalent basis. Capital limits would also be scrapped and there would be no need for a cap on care costs – as mooted in the recent Conservative election manifesto.
The new approach suggests financially rewarding people for saving towards their care. Ideas to do this include new accredited savings vehicles and the introduction of ‘care saving accounts’ which could help to bring new money into the system.
This would be in the knowledge that savings or additional income would not be used as an excuse for reducing state support as is presently the case and that there would be rewards for people who do save.
With the number of UK citizens aged over 75 doubling to 10 million by 2040 and with 1.3 million people already receiving social care services in England alone, the demand for long‐term care is expected to increase significantly in coming decades.
Currently responsibility for providing care is split between the individual and the state with the state acting as a provider of last resort.
Eligibility under the present system support depends on one’s assets and income. The problem is that this support is withdrawn on a pound for pound basis as income increases and secondly assets are treated differently which can create perverse behaviours.
The preferred system proposed by Cass aims to:
- Create a means test that can be used both for domiciliary and institutional care with equal clarity;
- Make the system fairer and more transparent e.g. by removing ‘cliff edges’ which cause perverse behaviours such as the deliberate disposal of assets;
- Treat people with similar personal wealth, but which is split differently in terms of income and assets, equitably and fairly;
- Simplify the rules so that anybody could reasonably be expected to undertake their own assessment with minimal financial expertise or by using resources on the internet;
- Bring new money into the system, primarily privately from individuals and not from the state, by providing the appropriate incentives to save.
Report author Professor Les Mayhew, Professor of Statistics, Cass, said disquiet over proposed Conservative pledges on social care contributed to the Prime Minister’s election difficulties and led to social care policies being skated over in the Queen’s Speech, with only the briefest of mentions of a consultation.
“Whilst we welcome this commitment to consult on social care funding, we urge the Government to take action and consider the most recent research and thinking. Our research sets a balance between the responsibility of individuals to provide for their care and that of the State. Our approach offers a new way in which people are not penalised but rewarded for saving and planning ahead.”
Baroness Sally Greengross OBE, Chief Executive of the International Longevity Centre – UK (ILC-UK) said:
“The ILC-UK welcomes this contribution to the urgent and ongoing debate around how to support our pressurised adult social care sector, so that it can support our rapidly ageing society. At a time the Care Quality Commission has described as a ‘tipping point’ for the social care sector, the suggestions contained in this report make an important contribution to a debate that can no longer be postponed.”
Tom Kenny, Chair of the Pensions and Long-term Care Working Party, Institute and Faculty of Actuaries (IFoA), said:
“We believe there is a need to reform the means test for social care as it is currently complex and a disincentive to individual saving. If the Government wants to encourage people to take greater responsibility for their long-term care costs, then the system needs to incentivise savers, be easier to understand and navigate, and not penalise them.“
The research is published in The Geneva Papers and can be read here.