Care home fee solution: pay when you die

13 July 2012

Old people moving into care homes will be able to borrow money from the government to cover their fees, under plans unveiled today.

The "pay when you die" scheme, which will be introduced in 2015, will see councils lend money to nursing home residents and recover it after death from their estate.

A care home place costs around £26,000 a year, and, at present, only people with limited savings and assets are able to get any state help with the cost.

The secretary of state for health, Andrew Lansley, unveiled the plans today as part of the social care White Paper, although details of how the loans will be financed won't be revealed until at least 2014.

A helping hand

"Our plans will end the scandal of people being forced to sell their home to pay for their care. From 2015, everyone will be able to get a loan instead of having to sell their home while they are alive," says Lansley.

The White Paper also:

  • Set out plans to abolish the postcode lottery for social care by bringing in a national threshold for access
  • Introduced rules that will make it harder for councils to permit home help visits of only 15 minutes
  • Announced plans to provide millions of pounds to help people stay in their own homes
  • Stated that the government is considering free social care for the terminally-ill to help them stay at home.

Michael Kitts, partner, government and public sector, at PricewaterhouseCoopers, says some progress has been made, but 'many questions remain unanswered' and the issue of future funding has not been properply addressed.

He comments: "There is still lots of uncertainty. For example, the level, and application of any cap on care costs; how residual costs beyond the cap are funded by local authorities and others, and the practical details of loan schemes, such as how local authorities can fund the cost of care, which will be an immediate requirement, pending the agreement of any loan.

"But local authorities cannot wait until all of this becomes clear to take action. The demographic shift and demand for care services is not going away. By 2033, a tenth of the population will be over 75."


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