The government should consider allowing older people who need long term care (LTC) to keep more of their incomes, rather than tinker with capital limits, according to a new study.
The research by the University of Leicester and funded by the Nuffield Community Care Studies Unit, is critical of the LTC debate’s pre-occupation with capital and the fact that older people often have to sell their homes to pay for care.
Looking at possible changes to the residential care means tests, it found allowing people to keep more of their income would target extra state help on the poorest.
Currently people have to put nearly all their income towards the cost of residential care and are left with just £15.45 a week.
The main findings are:
Making nursing and personal care free of charge, as proposed by the Royal Commission on Long Term Care, is the most expensive option, benefits the richest group of older people most and brings small benefits to the poorest.
Raising the savings limits gives most help to those in the middle income group (and to homeowners) but quite substantial increases in the lower, as well as upper, limits are needed to produce noticeable benefits.
Raising the lower capital limit to £60,000 and the upper limit to £100,000 benefits those on middle income more than providing free care, but would cost the government only about half as much.
Disregarding more income, rather than capital, benefits the poorest most, gives some benefit to those in the middle and almost no benefit to the richest.
Author Ruth Hancock says: “There are no indications that the government is willing to spend a lot of extra money to ease the means test for LTC. 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 keep more than the meagre £15.45 a week of their income that they are allowed under the current rules.”
The government is expected to respond to the Royal Commission on Long Term Care this month.