Tax on over 40s could raise £15bn for social care, report
A new tax on the over 40s which is expected to be included in the Government’s Social Care Green Paper, could raise £15bn a year.
Research suggests the 2.5% levy on incomes would help fill a £30bn funding shortfall, The Independent reported.
New funding models for social care have been investigated by Parliamentary select committees (see House of Lords Committee launches social funding inquiry).
Health and Social Care Secretary Matt Hancock told the Sunday Telegraph last month: “I am impressed by the work of the select committees who have come up with a model that is adapted from what was introduced about 20 years ago in Germany, and it appears to be working there.
“One of the reasons I’m attracted to the proposal is that it’s cross party. This is a problem which can only be solved by people coming together behind a solution, because as soon as it’s turned into a political football it makes it extremely difficult to make any progress at all.
“I’m prepared to have a range of options and see if we can build a consensus around one of them rather than be dogmatic about it.”
New research carried out by pensions and risk consultancy Hymans Robertson suggests a German-style system could raise half of the money needed to plug the £30bn-a-year gap in social care funding the UK is facing by 2031.
The Telegraph has reported, meanwhile, that the Government has been urged not to set any care cost cap on social care that is too high.
The advice comes after the Alzheimer’s Society said that capping costs at £72,000 would only affect 7% of those receiving care.
A cost care cap is expected to be proposed in the Social Care Green Paper, which is now expected to appear as soon as next week.
The report said that the Government would defer setting the level of the cap.