Social care premium for people over 40 could cover costs of ageing population, say MPs

A cross-party group of MPs is urging the government to consider a 'social insurance system', with the additional funds generated being used to fund social care

A cross-party group of MPs is urging the government to consider a 'social insurance system', with the additional funds generated being used to fund social care

Social care
Picture: Charles Milligan

A new social care premium to be paid by people in England from the age of 40 has been recommended by MPs.

A cross-party group of MPs say the premium would help to meet the spiralling costs of care for the country's ageing population.

They say the 'social insurance system' could either operate as an additional element of national insurance or through a separate mechanism, as happens in Germany.

Funds earmarked for social care

In a joint report the Commons' health and social care as well as housing, communities and local government committees urge the government to consider moving to such a premium with the additional funds raised to be specifically earmarked for social care.

To ensure fairness between generations, payments into the fund would start at the age of 40 and would be extended to those over 65.

'We heard strong support for the principle of earmarking contributions – it was felt that establishing a visible fund that is clearly, transparently and accountably linked to spending on social care is key to gaining public acceptance for this measure,' the report says.

Calculating contribution levels

The MPs say consideration should be given to setting a minimum earnings threshold, to protect those on low incomes, and to the inclusion of unearned income, such as pensions and investments, when it came to calculating an individual's contribution level.

The aim of the system would be to ensure the personal element of social care – such as washing, dressing and eating – is eventually available free at the point of delivery to everyone who needs it, although accommodation costs would continue to be means-tested.

With an estimated funding gap of up to £2.5 billion in the next financial year alone, the report acknowledges that this is unlikely to be affordable immediately, and says the first priority should be to extend free care to those whose needs are deemed to be critical.

Fair and sustainable

In a further measure it calls for an additional inheritance tax charge on estates valued above a certain threshold, as a way of 'pooling risk' to prevent those requiring long-term care being faced with 'catastrophic' costs.

With the government due to bring forward fresh proposals in a green paper in the autumn, the report recommends the establishment of a parliamentary commission to ensure progress on the issue.

Health and social care committee chair Sarah Wollaston said: 'We can no longer delay finding a fair and sustainable settlement for social care. Doing nothing cannot be an option.'

 The government will respond to the report in due course.

Further information

Read the committees' report

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