Care white paper opts for care free at the point of need

Launching his Building the National Care Service white paper today, health secretary Andy Burnham said the government was “committed in principle” to a service funded by a compulsory payment which would replace the current means tested system, with care free at the point of use.

However, the paper stops short of spelling out how the compulsory contributions will be made. Instead, it says the government would refer that question to a cross party commission, if it were re-elected in May.

The government estimates £2.9bn would need to be raised through the compulsory payments if the system started in 2016-17 and a further £0.7bn of current public spending could be diverted from the NHS and benefits system.

Options likely to be considered are a one-off care duty of between £17,000 and £20,000, which would be payable on retirement, but has been dubbed a “death tax” by the Conservative Party.

The service would be based around a standard national needs assessment that would establish the care package needed by each person. Needs assessments would be “carer sighted”, meaning people cared for by relatives might receive smaller packages than those who are not.

Mr Burnham said the move to make social care “free at the point of need” would create greater opportunities for joint working with the NHS and “significant” savings (see box).

The white paper proposes a three phased approach to reform. The first will implement the government’s care at home bill, which will provide free care for 280,000 people with the highest needs from 2011 onwards.

The second phase will fund the care – but not accommodation – fees of an estimated 60,000 elderly people whose stay in residential care homes extends beyond two years from 2014. That will cost approximately £800m a year and will be paid for by freezing the inheritance tax threshold for five years and a planned extension of the compulsory retirement age.

During the next parliament, a Labour government would agree payment methods for the third stage – the comprehensive national care service. It would pass the legislation needed to establish that service but Mr Burnham said it would not be introduced until after a further general election, which would be due after 2015.