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Care minister hits back over ‘indefensible’ LTC plans

Care minister Norman Lamb has defended plans to introduce a means test to pay for long-term case after Labour peer Lord David Lipsey warned people will still be forced to sell their homes under the reforms.

Under the Care Bill, a deferred payment scheme allows people to defer paying for care until after their deaths. The scheme is only available to those with assets excluding their home of less than £23,250.

The Daily Telegraph has quoted care minister Norman Lamb as saying that people of “quite significant means” should be expected to pay for their own care, but argued no-one would be forced to sell their home to meet care costs.

Lamb told the newspaper: “If someone as well as their home has substantial other assets, money in the bank, shares or whatever, should they be expected to use those assets to pay for care? Or should we say, we will always defer the costs of selling their home?

“If you have got a vast amount of money in the bank, you are quite wealthy, it is desirable that we protect that money but the scheme has to be affordable.”

He added: “If together with owning your own home, you have more than £23,000-odd in the bank, the question is should you be expected to use that money. You are not forced to sell your home.”

In the House of Lords earlier this week, more than 200 rebels voted to make the voluntary deferred payments system available to all but the Government’s position passed.

Speaking to Money Marketing following the vote, Lord Lipsey, who is Society of Later Life Advisers president and a long-term care expert, said the policy is “indefensible”.

He says: “People will still have to sell their homes as there will be practically no take-up of Dilnot if the Government sticks to this. A major plank of Dilnot has been whisked away. My guess is the Government will do a U-turn on it because it is indefensible and without justification.

“I hope they change because otherwise they will face an army of protest that will harm the coalition and the Government. It has to drop the threshold.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. There are a few things here that mean, for once, I find myself in the strange position of agreeing with the Government.

    Firstly, why should the taxpayer provide loans to wealthy people with other assets from which they can fund their care. This is supposed to be a safety net – not a financial planning service.

    Secondly, which of us IFA’s would dare to recommend to a client that they take out an interest paying loan in order that they can keep a chunk of money in the bank, or in investments? It’s called ‘geared investing’, it’s usually very high risk. For people aged over 80 any IFA recommending Lord Lipsey’s course of action would find themselves before the FOS faster than they can say ‘PPI’.

    On a wider front, with the problems in the housing market, as a nation do we really want lots of houses standing empty whilst people are in care. I haven’t checked the rules for the proposed DPS but under the current one, any property rental is treated as income and deducted from the amount that will be loaned. Hopefully the interest paying DPS will be more flexible and will allow clients to borrow more than the local authority funding limit. If not, we’ll see a lot more empty homes.

  2. I agree with Soren, but I do also think that the limit could be a little higher to give a bit more flexibility.
    You could even link it to the trivial pension limit and increase the trivial pension limit to 3% of the lifetime allowance.

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