At the age of 91 my grandmother, after a number of falls and declining mental health due to the onset of dementia, could no longer look after herself at home. She’s very much lived life to the full having been born in colonial India and living the lifestyle that went with that to serving in the cryptographic office of the Army in Karachi during WWII before being dispossessed by partition and ending up in a terraced house in Birmingham in 1952 shortly before giving birth to a son (my dad) and later on his brother.
She has worked all her adult life and paid her share of taxes and national insurance. However, when the time came for her to be taken into care home the social worker soon talked with us about how her placement was going to be paid for. Her house, it was taken as read, would have to be sold to pay the £500 a week cost of her care. My grandmother worked hard and built up relatively modest assets that she wanted to pass down to people of her choosing and not have it chewed up by care home fees.
People who have to go into care who do not own a home, generally speaking, do not have to pay care costs, unless they hold huge amounts of savings or investments - although these are far easier to dispose of when needed than a house. By and large people in this situation do not need to worry - the state will, rightly, cover the costs of their care.
The government has admitted that the current system of paying for elderly care is ‘unfair’, but that’s about it for now. If you have over £23,250 in assets then you will have to meet the full costs of your care.
At the same time, a housing crisis continues to engulf the UK, hitting young people the hardest. According to the Royal Institute of Chartered Surveyors, rents will continue to rise 15% over the next five years. Changes to tax breaks and the increasing cost of mortgages for buy to let investors is leading to a shrinking supply of rental property.
So what we have is one group of people with property who can no longer live in them because they require round the clock care which is so expensive they are being made to sell off their assets, depriving their families, friends and charities of an inheritance. And another group facing rising rents due to the increasing scarcity of rental property and buying becoming evermore out of reach for people on average or low salaries.
Why not let people who require residential social care to rent out their homes? ‘They can!’ you may cry. Well, yes, they can but they are taxed on the income they receive and, outside of London, the money made for renting out a house or flat as a whole, rather than multiple rooms, won’t cover the weekly care home fee. Local Authorities are able to offer a deferred payment plan so that the property is sold when the person in care passes away to pay the costs - although the council loses out if the value of the house doesn’t meet the tab run up at the care home.
Allow elderly people to rent their homes out tax-free with any shortfall deferred until after they pass away. Their family or attorney can then decide whether to continue to rent the property out or sell the property to pay off the outstanding amount. Until free social care for all is realised this is the best way to ensure people who require social care get it, that councils are able to be sure they will recoup the costs of care they defer and families are not left feeling that they have been robbed of their birthright.