New tax for over-40s being considered by government to tackle social care funding crisis

12 November 2018
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Over-40s may soon have to pay extra tax in order to create a provision for social care funding.

The government is considering a new tax for the over-40s to help tackle the social care funding crisis, according to a report in The Sunday Telegraph

Health and Social Care Secretary Matt Hancock says he is “attracted to” the idea of a cross-party plan for a compulsory premium deducted from the earnings of those aged 40 to 65 to help plug the funding gap.

The system would be similar to the one used in Germany where workers over 40 pay 2.5% of their wages into a ring-fenced pot for social care.

The plan also includes offering cash payouts to those receiving care to enable them to pay carers, including family members.

Mr Hancock told The Sunday Telegraph: “I am impressed by the work of the select committees who have come up with a model that is adapted from what was introduced about 20 years ago in Germany, and it appears to be working there.

“One of the reasons I’m attracted to the proposal is that it’s cross party. This is a problem which can only be solved by people coming together behind a solution, because as soon as it’s turned into a political football it makes it extremely difficult to make any progress at all.

“I’m prepared to have a range of options and see if we can build a consensus around one of them rather than be dogmatic about it.”

Earlier this year, a joint Commons committee proposed a new payment be added to National Insurance contributions of those aged between 40 to 65 as part of an inquiry into funding the cost of adult social care.

Dr Sarah Wollaston, chair of the Health and Social Care Committee which helped propose the plan, says it would avoid placing an “unfair” burden on “working-age young employed adults”.

The Local Government Association (LGA) estimates that adult social care services face a £3.5 billion funding gap by 2025, just to maintain existing standards of care.

Meanwhile, figures show that councils in England receive 1.8 million new requests for adult social care a year – the equivalent of over 5,000 a day.

Last month’s Budget provided an extra £240 million per year for two years for adult social care, plus £410 million in 2019-20 for adults and children’s social care.

Councils will also be given £55 million this year for the Disabled Facilities Grant to provide home aids and adaptations for disabled children and adults on low incomes, plus £84 million over five years for children’s services.

 

Comments

In reply to by Hesperus (not verified)

Hesperus - I think you may have misread my comment, as you are making similar point as myself, in that, HAD they ring fenced NI & Road Tax (instead of using them for general taxation) our NHS and roads wouldn't be in the state that they are. They couldn't ring-fence sheep let alone specific tax revenues.

In reply to by anonymous_stub (not verified)

We should do what the French do. The TV licence is included in the rates. One has to apply to be exempt. No money is then spent chasing up the non- payers

In reply to by anonymous_stub (not verified)

The pension in Germany is better why is ours the worst in Europe.

In reply to by anonymous_stub (not verified)

i presume that only those over 40 will ever need social care - are the young people that grow old going to find some miracle way of avoiding the physical issues that affect my generation ?

In reply to by anonymous_stub (not verified)

i presume that only those over 40 will ever need social care - are the young people that grow old going to find some miracle way of avoiding the physical issues that affect my generation ?

In reply to by anonymous_stub (not verified)

This is a really great idea. Let us not allow it to die on the vine.I look forward to the days when all parents are taxed extra to pay for their children's education.Then as the taxpayers have largely paid for their training, we should have an extra tax on doctors who don't want to work. And as we're talking about medical matters, an extra tax on parents who are too lazy to bother to get their children vaccinated.And best of all, a separate civil service department to administer each tax.You know it makes sense!

In reply to by anonymous_stub (not verified)

Employed retired people should still pay National Insurance Contributions. It may also encourage some to actually retire and create a job vacancy for an unemployed person.

In reply to by anonymous_stub (not verified)

How would the unemployed pay a social care tax? They already get the better service than people who have been fugal all of their lives?

In reply to by anonymous_stub (not verified)

While I'm on the subject of paying out too much money isn't it about time the telivision licence was scrapped then we wouldn't have to pay for those so called journalists sitting on a bloody settee all morning drinking tea etc

In reply to by anonymous_stub (not verified)

You know politicians really do annoy me beyond words,I am 65 and worked all my life from 15 yrs old,when I decided to draw my final salary pension it was raided in the fact that it was no longer linked to the rpi but linked to the cpi which devalues my pension income,now the government is at it again,why should 40 to 60year olds fund the care system

In reply to by anonymous_stub (not verified)

So basically screw over people for them back pocketing public funds when there is more than enough money for this, but they have to pay their bribe to the DUP, tax cut for the rich and their donors! Disgraceful!

In reply to by anonymous_stub (not verified)

If they'd ring-fenced National Insurance contributions in the first place we wouldn't be in this mess......same goes for the state of our roads and the Road Fund licence/Car tax.

In reply to by anonymous_stub (not verified)

to subsidize all the people who don't have to pay for it or plug the gaps in over generous funding elsewhere more like

In reply to by anonymous_stub (not verified)

Ring fenced? Like National insurance? Like Road Fund? Both have been raided for general taxatioln purposes. Basically you cannot trust politicians not to grab funds wherever they can. If we stopped spending on vanity projects like HS2 we would be better able to consider why there is a crisis.

In reply to by YashamatotoBic… (not verified)

I got you and basically I have thought it myself for many years regarding the Road Tax. Trouble with social care is that has become SO expensive which I found out when searching for somewhere for my dad. Three years ago I discovered that you got very, very little for £900 a week. Not even an en suite room. And prices have gone up even more since then

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