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The Actuary The magazine of the Institute & Faculty of Actuaries

Reform of the long-term care system


In response to Soapbox (September 2017) – Part of the cost of long-term care should be recouped from deceased estates. That is the core principle, which, I suggest, should be considered as the foundation for a reform of the long-term care system.

One way in which it might work is as follows, but many variations are possible, depending on political choices. There would be a cap of (say) £50,000 on the amount that anyone would have to pay towards the cost of their own care during their lifetime, and no-one would have to sell their home to meet this cost.  The estates of all people dying in a particular year (whether they had needed care or not) would be liable for a levy, designed to meet the total cost of applying the cap in the previous year.  The levy could be a flat percentage of the value of the estate (whatever its size) and would apply to all estates above a specified threshold – for example, £100,000.  In the case of married couples, the levy would not be payable until the second death.

A possible variation would be to increase the levy so that it met more of the cost of long-term care, thus enabling a higher standard of care to be provided to everyone.  

The reform could be introduced quite quickly, with transitional arrangements for those already receiving care. It would not involve any net cost to government, while introducing a degree of certainty that would be welcomed by the many people who are worried about enormous costs if they (and perhaps their partner) turn out to need years of care in future. 

Chris Lewin

4 October 2017