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Councils must offer loans to fund LTC

Andrew Lansley Conservative health MP

People who need help funding long-term care will be able to borrow the money from their local council, which will be recouped when their home is sold or remortgaged after they die, under proposals put forward by the Government.

Last week, the Government unveiled its social care white paper. It supports the Dilnot Commission’s proposals for a cap on the cost of care of between £35,000 and £50,000 and an increased means-tested threshold of £100,000 “in principle” although a final decision on the level of the cap and how it will be funded has been put back until the next spending review, which the Treasury says is expected in 2015/16.

There is currently no cap on the costs of care and the means-tested threshold is £23,250.

Announcing the plans in Parliament last week, Health Secretary Andrew Lansley said he is considering a voluntary scheme for the cap where individuals would only be covered if they pay into a social insurance scheme.

There are concerns the cap could be set higher than the level suggested by Dilnot after slides from an internal Department of Health presentation in November said a cap of between £50,000 and £60,000 might be “optimal”. Dilnot says he would be satisfied with a cap at that level but warned against it being set much higher.

The council loan proposals are in the draft Care and Support Bill, published alongside the white paper. If it becomes law, the scheme will be in place in April 2015. Councils will be able to charge the interest necessary to cover the costs of the loans.

Lansley said: “Our talks with the Labour party were constructive but no plan for funding Dilnot was agreed or indeed proposed by either side. A decision at the next spending review will allow time for further discussions that will include the level of the cap and whether a voluntary or an opt-in approach is a viable option.”

Prior to the 2010 election, Lansley, then Shadow Health Secretary, branded Labour plans for levy to be paid after death to fund a National Care Service as a “death tax”.

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