June 2000

No 111


Government should consider allowing older people who need long-term care to keep more of their incomes rather than tinker with the capital limits, says new study

New research is critical of the long-term care debate's pre-occupation with capital and the fact that older people often have to sell their homes to pay for care. It says that allowing people to keep more of their income would target extra state help on the poorest. The University of Leicester research was carried out by Ruth Hancock, Senior Research Fellow and funded by the Nuffield Foundation.

However, instead of allowing people to keep more of their incomes when they go into residential care, the Government is likely to let older people keep slightly more of their capital. That would help those on middle incomes most, but substantial increases in the limits would be needed before the effects were noticeable. Making all care free of charge, as proposed by the Royal Commission on Long-term Care would benefit the rich most.

The findings will be announced on Thursday, June 15 in London. Speakers at the launch will include Sir Stewart Sutherland, Chairman of the Royal Commission on Long-term Care and Baroness Sally Greengross.

Currently, whatever their capital, people have to put nearly all their income towards the cost of residential care. Looking at various options for change, the report concludes:

  • Making all care free of charge is the most expensive option, benefits the richest group of older people most and brings small benefits to the poorest. But it does remove the financial incentive for local authorities to place older people in residential care rather than care for them in their own homes.
  • Raising the lower capital limit to 60,000 and the upper limit to 100,000 (much bigger increases than are expected) benefits those on middle incomes more than providing free care, but would cost the government only about half as much.
  • Disregarding more income, rather than more capital, benefits the poorest most, gives some benefit to those in the middle and almost no benefit to the richest.
  • Ruth Hancock, Senior Research Fellow and author of the research, says 'There are no indications that the Government is willing to spend a lot of extra money to ease the means test for long-term care. So it will be under pressure to make sure that what it does spend is targeted on the poorest. The easiest way to do that is to let people to keep more than the meagre 15.45 a week of their income that they are allowed under the present rules.'

    Notes for editors:

    The report will be launched on Thursday, June 15, 2000 at 12.45 pm in the Bishop Partridge Hall at Church House Conference Centre, Westminster. There will be opportunities for photographs and interviews.

    For further information and to confirm you will be attending the launch, contact Ruth Hancock (author), telephone 0116 252 5422 (University of Leicester), 0116 270 3202 (home).

    Charging for Care in Later Life: A Summary of the Effects of Reforming the Means Tests by Ruth Hancock, is available from the Nuffield Community Care Studies Unit, University of Leicester, 22-28 Princess Road West, Leicester LE1 6TP.

    The research was funded by the Nuffield Foundation and uses Government survey data on the incomes and capital of 2,000 people aged 80 and over who currently live alone, to analyse how much they would have to pay towards long-term care should they need it.

    The Government's response to the recommendations of the Royal Commission on Long-term Care for elderly people is expected in a White Paper next month.

    The Nuffield Foundation is a charitable trust established by Lord Nuffield. Its widest charitable objective is 'the advancement of social well-being'. The Foundation has a special programme of grant-making in Older People and their Families. The Foundation has supported this project to stimulate public discussion and development of practice and policy. The views expressed are, however, those of the author and not necessarily those of the Foundation.

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    Last updated: 08 June 2000 15:22
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