The big election story has been the Conservative policy on the funding of adult social care.
The details of the plan were not well communicated and this left the door open for some breathtakingly opportunistic attacks from Jeremy Corbyn and Tim Farron. Are we really supposed to believe that these left leaning politicians are now on the side of people inheriting valuable properties?
The Conservative policy has two main elements to it, both of which I support. The first is a significant increase in the amount of money you can retain before qualifying for fully state funded social care. Currently if you have more than £23,250 you do not qualify. This figure is being raised to £100,000.
At the moment, the way in which people’s assets are calculated varies widely. If you receive care in a nursing home and own a property, the value of your property is included as part of your assets. However, if you receive care at home, the value of your property is not included, meaning that you reach the current £23,250 threshold more quickly. This is clearly unfair and the second element of this policy proposes to align the future basis for means-testing for home care with that for residential care. This is good news for those homeowners who receive care in a residential home as they will qualify for state funded care sooner.
The policy would mean that no one would have to sell their property to pay for care or move out of a home they have lived in, nor would their spouse, but the cost of their care would be deducted from their estate. Even in this circumstance they will be able to pass on £100,000 to their beneficiary when they die.
What was poorly communicated was the fact that the manifesto also included a commitment to publish a Green Paper (consultation) on the other details of the policy. These details would include things like an overall cap on how much an individual would be expected to pay for social care, introduction dates, exemptions etc. The cap is important because without it the potential exposure of risk to insurers is unlimited and unattractive. Once a maximum liability is in place, actuaries can do the sums and price policies aimed at middle-aged customers who want to guarantee that they are looked after well in their old age and to protect their family assets in return for a monthly premium.
Jeremy Corbyn and others want you to believe that everyone can get everything from the state for free. That somehow the tens of billions of pounds of unfunded spending commitments in their manifestos can be paid for by someone else. They can't.
The funding of adult social care is one of the most significant challenges of the next few decades. In this country, there are now one million more people aged over 65 since 2010. There will be two million more people over 75 years old in the next decade alone. There will be a third more people aged over 85 in 2024 than there were in 2014. We cannot expect our children and our grandchildren, some of whom are already saddled with student debt and unable to buy a home of their own, carry the costs of the older generation. If there was a cheap simple way of dealing with it, we would have seen it implemented by now.
At the election the choice is between Corbyn who is promising everyone everything that they want to hear and Theresa May who is making the right and sometimes difficult choices in the national interest.