A new insurance law, which will require the residents of Guernsey to pay mandatory long term care (LTC) insurance contributions, may take effect next year, subject to Privy Council approval.
Once the proposal receives approval, the law is expected to come into effect from 1 January 2003 when contributions from residents will become mandatory.
The Government in Guernsey, known as the Bailliwick, is still working on the final format of the scheme. But it will effectively mean that all those earning over a set income (the limit is yet to be decided) must contribute and the state funded benefits will become payable from April 2003. Benefits, which are likely to be £200 a week for residential homes and £500 a week for nursing homes, will be available to those who have been Guernsey residents for at least five years.
After making a claim for care, individuals will also have to contribute a minimum of around £120 per week towards care costs (similar to an excess) and they, or third parties, will also be responsible for the further cost of care over and above the benefit.
Owain Wright, head of the Care Funding Bureau, said that the scheme was “interesting” and “innovative” and effectively places the Guernsey Government in the position of an insurance company.
He added: “Consequently the success or otherwise of the scheme will be dependent on the accuracy of financial projections – a particularly difficult task in this case due to the number of variables involved. It may well benefit the pre-funded LTC market because it will add clarity to the question of who pays for what.”
Paul Harvey, managing director of the Care Consultancy, said: “While I applaud any efforts to fund LTC what would happen in the event of the death of a resident having paid a great deal of money for those benefits. Surely it’s unfair?
“And what if someone finds themselves unemployed, will the Government in Guernsey make up the shortfall?”