Under a Labour proposal there would be a 10% tax levied against the estate at death to fund the new care initiative, the National Care Service.
It appears that pollsters Ipsos Mori were hired to phone people and ask people if would be in favour of a free at the point of delivery social care system if they were charged a 10% tax on their estate at death.
The National Care Service aims to provide early intervention and to provide care in the home offering a one to one care service for some. Social care users would also be helped into paid employment so reducing cost. That way, it is argued, there will be fewer hospital admissions and reduced demand for emergency services. It will also overhaul the whole care for the elderly system.
But as ever, whether or not there are savings in one area there are always rising expenses in another.
Last year the Telegraph reported that care fees had gone up an average of 45% over the preceding two years. But the charging for the fees fluctuated wildly throughout the country. A funded national system would aim to smooth this out.
The initial thoughts on funding (about Â£20,000 per person) included lump sum payments, insurance type payments, a hike in National Insurance or a new death tax.
Some would hail the National Care Service as the biggest reform of our care system as the start of the NHS was. The NHS has grown in cost and complexity over decades, now we will have two systems growing side by side in the same way. We will need to raise a lot more tax to fund them.
Without details on how any tax raised to fund this is applied to the tax payer, we can’t really assess its impact on us. Will it only apply to inheritance tax (IHT) payers, or to all? If it applies to IHT payers only they will be handing over a total of 50% of their estate on death.
But what worries me is that any tax raised will go into the Chancellor’s pot to be distributed ‘as required’. Just like vehicle licence tax is. It will also, in all probability, be means tested. So those that pay the tax will generally not benefit. Some would argue that that is unfair (especially heirs) whilst others would argue that paying taxes after you are dead is the most painless way of coughing up and why should the heirs expect anything.
Then there are the general health issues, should smokers, drinkers and the self-made obese qualify for this care? And would everyone who entered the country qualify automatically for it?
At the end of the day, who pays for it and who qualifies for it?