I seem to be completely out of sympathy with every commentator in the debate on care for the elderly, which is today’s mainstream news agenda. The Dilmot report recommends that the asset level you can have before you start getting charged for residential care, is raised substantially to £100,000. I don’t have a major problem with that.
But it also suggests that the total amount you have to pay for residential care is capped, at £35,000. That means that someone with assets of £90,000 would pay nothing, someone with assets with £110,000 would pay £10,000, someone with assets of £135,000 would pay £35,000 and someone with assets of £10,000,000,000 would pay £35,000. What a stupid proposal.
I am totally out of sympathy with the whole concept. Am I entirely callous? It seems to me perfectly natural, that in your childhood years you are a net cost. Then you have economically active years where you accumulate a certain amount of wealth. Eventually you have economically inactive years when you are a net cost again, and your accumulated wealth dissipates. Then you die.
Why on earth try to adapt the system so you die with money? What are you going to do with it when you are dead? It is crazy. Why should taxpayers fund a system of state paid care, so that people can pass on unearned (by the recipient) wealth to their children?
I favour without any quibble or reservation, care provided fot the elderly so that everybody – no matter how poor – has dignity in life right until the end. But I also believe that those who can pay for it, should. That “callous” system also contains an economic incentive to those wanting to get their hands on inherited wealth, to look after their parents themselves rather than pack them into a battery farm.
As far as I can see, this proposal that taxpayers shell out untold billions to protect inherited wealth, is a scam to protect our ludicrously overpriced housing market.
It may be true that ‘you can’t take it with you’, but by the same token, they can’t get it back off you when you’ve gone, so I reckon, if you die owing – you’ve won!
Pete
I agree that it’s important that people should have proper care and treatment in old age. And I don’t think there’s any “right” to inherited wealth. However I do think it’s important that, if elderly people share a house, care for one should not mean homelessness for others. And I’d like to see carers protected from homelessness. I’ve come across several people who, in order to look after elderly relatives, have chosen to limit their own life opportunities (for instance, by cutting or curtailing work hours or even delaying marriage for years and giving up the chance of having children). I also have friends growing older who are responsible for children with disabilities, who will always be dependent. My worry about these proposals and any proposal is the problem they may pose for carers and dependents. I don’t want to see carers – sometimes past retirement age themselves – made homeless because they can’t raise £35,000 in any other way – and I don’t want elderly parents or carers worrying about the future of their dependents.
It would be good to have a society which helped and supported carers.
Well yes, that would be the point of dying with money – passing it on to your children. Often not ideal. The richest in society today must mostly be so because of a positive feedback loop in this process – and all they do is bugger off to Canada shake hands and throw some soil over trees. Try to stop it, e.g., by government policy, more careful tracking of parent/carer and child bank accounts, and you’ll find only the super rich, with access to financiers and offshore accounts, will manage to pass on the dosh. (Maybe, following Mark Thomas’s “People Manifesto”, bombing Switzerland can help the government policy though.)
I can see the arguments for preventing all of this: punishing shit-for-brains whose only talent is money grabbing, spending, and continually talking like they’re making a wedding speech. I suspect however that upward social mobility depends rather a lot on inheriting money – increasingly so as university fees increase and taking out student loans becomes less appealing.
I get the impression that many parents sell their souls to work in shit but well-paid jobs so their children can do something meaningful – but maybe this is wishful thinking.
Okay, I’ve presented little evidence there. Maybe it’s helpful just to state opinion: a decent society should provide incentives not to hoard money and (similarly) not to work only for cash, rather than social, benefit, e.g., by allowing talented people from poor backgrounds to get to university; by offering decent pensions; and by accepting that older people will often end up living alone as their children have to disappear off to other countries to get an interesting and meaningful job (and to diversify the gene pool a bit!). The latter problem could conceivably be solved by improving communities. I imagine I’d quite like to die surrounded with friends, family, and I’d also like to meet younger people who have just moved into the local area who can tell me about the latest gossip, politics, music, and technology.
Firstly, I don’t think the argument that this benefits millionaires carries much weight. Even if someone with large assets could get local authority care for no more than £35,000 in total, it’s far more likely that they would voluntarily spend some of their own money to live in a private care home.
One argument being presented this morning for Dilnot’s proposals is that presently it isn’t possible to insure yourself to be looked after in your old age. If a cap makes it feasible for insurance companies to offer policies, that seems a good idea.
Secondly, there is the feeling that those who have spent all their money during their lives (or carefully salted it away in trusts) get free care, whereas those who have saved and still own their houses have to pay. The strength of this argument is dubious in my mind, but I’d have to admit that a lot of older people and their heirs (voters) feel this way.
Indeed, once upon a time inheritance was a very useful thing. But nowadays, with our longer lifespans, most people who inherit are in their 50s (at least) and have already worked very hard to make themselves comfortable. A 100% inheritance tax would be fine by me.
Yes Craig, what am I supposed to do with my assets when I am gone?
Why would it be OK for hard-pressed hard-working tax payers to fund residential nursing care for elderly people who have a house lying empty that they are no longer capable of living in alone. My mother, in her nineties, is of the same opinion – if you’ve got money you have to pay for your care, simples.
My kids know that they will be very lucky if there is anything left for them; I am saving to fund my old age, not to leave it to them.
“I get the impression that many parents sell their souls to work in shit but well-paid jobs so their children can do something meaningful – but maybe this is wishful thinking.”
So am I, how much does ‘leaving money’ pamper and divert what should be hungry aspirational youth endeavours. My boys know that I will leave them a well producing healthy garden, my stonemasons tools and thats about it.
Does our sometimes misguided support for our offspring help or hinder? What are the influences that encourages our young to get active and become economically viable, is it the silver spoon or the hard graft, there ought to be a study done…
We are being trained up by this Dilnot exercise to accept the idea of private insurance. The analogy of insurance for your house and car was actually used in today’s spiel. Private health insurance is coming to you soon courtesy of Lansley and the ConDems. Branson and co are waiting in the wings.
I don’t think it’s helpful to conflate net worth, inheritance tax and elderly care in the same argument.
Elderly care is a simple matter of what we as a society want to ensure all senior citizens are entitled to. Means-testing this? Count me sceptical… the wealthiest in society, as they always do, will opt for the premium care they can afford; the handful of people on the margin who can be denied certain care because they are a few grand too well-off will hardly be justified by the cost of the extra bureaucracy.
Inheritance tax should start at a low threshold and should be highly progressive. Not because we need to pay for care for the elderly, but because it is the right thing to do when it comes to unearned wealth.
Eddie G
Very sensible points. But the current system encourages old people to retain empty homes they are never actually going to live in again. I should be most interested if there is an estimate for the number of empty houses belonging to old people in care – I suspect it is quite high. This at a time of housing shortage. The proposed new system will increase that number, possibly radically.
I suspect most of you have never seen in a care home or a nursing home, or seen the hoops that council assessment teams jump through to prove that completely incapable elderly people are fit to look after themselves. Decrepit old people are designated as not requiring ‘nursing’ care in order to prevent costs to the state. It’s iniquitous in and of itself. But, if you remove the incentive to save money by pre-allocating all of it to care home fees, you’ll find that people stop bothering and ensure that they retire penniless and destitute thus making the problem far wore than it already is. Some kind of means testing is inevitable, but until there’s proper justice at the assessment level, the problem won’t be resolved by any cunning financial plan.
Personally, I intend to go in a spectaculr hang-gliding accident in the Andes when I’m 90, by which time I’ll have carefully sidelined any assets I may accrue into the same offshore mechanism that Vodafone uses to dodge its 6 billion tax bill.
“I should be most interested if there is an estimate for the number of empty houses belonging to old people in care ”
Don’t know about old people, but there are some 400.000 empty properties, many down to specualtive purchases, it was 600.000 at one time, still with that many houses empty, nobody should be homeless. This report is flawed in so many ways, thanks eddi for pointing out the amalgamation proposed.
Peter,
Thank you. It in no way invalidates your other points, but I would be surprised if any, let alone all, readers of this blog had never seen inside a care home.
If we turn over the care coin we realise that residential care services are indeed in crisis. Gone is the cash cow delivered by the Thatcher government (the enabler) as a result of the Griffiths report and subsequent new legislation which was enacted in the National Health Service and Community Care Act 1990.
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Dilnot will not provide a short term solution to the problem, meanwhile Age UK has reported that the care home sector will need billions of pounds in government funding to survive the current crisis. Councils no longer have care homes and those that exist are being sold off to provide for more lucrative student residences.
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Beware! the bottom line *is* Cameron & co are looking at opening up the NHS and care to more private companies (another lesson in the risk of leaving care in the hands of profit makers); the current proposals by Dilnot will be kicked into the long grass until private care loan schemes secured on property can be shown to make considerable profit on arrangement fees. For the rest of us it means, decrepit, senile, creaking, doddery, burnt out or not, we must remain in our own homes with minimum care silently wishing our well educated children hadn’t left for far off lands or Spanish bistros.
The capacity of the education/media brain mincer to deform our minds is great. Once again we are fundamentally unable collectively to ‘see the wood from the trees’. Taxing inheritance money can be either fair or unfair. Taxing inheritance is fair when the money is amassed from unearned income (‘rent’) and it is unfair when the money represents earned savings (‘wages’). The distinction between earned and unearned income is completely uncontroversial, that is – unless one accepts uncritically the fountain of ‘established’ truths emanating from our education system and the media.
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Introducing inheritance tax laws is treating the symptoms of disease instead of the underlying cause. The cause of the malaise is that as a society we allow unearned income, worse – the right to unearned income is considered sacred – it is the right to own privately land and resources therein. The fundamental distinction between land and other types of private property should be obvious. If you do not know what is meant by this, please read Henry George’s Poverty and Progress.
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There is another type of private property that fundamentally contradicts the principle of fairness – private ownership of the means of exchange (‘money supply’). Between them, individual and corporate owners of land and debt-issuing banks amass vast sums of unearned income. This is the dominant reason for the persistence of family fortunes, not lax legislation with respect to inheritance tax.
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So what, some will say – an aspirin for a headache is better than nothing. But in that sense, the proposal does not even treat the symptom, it is almost the opposite of fair. To be sure, it is just like virtually all such arrangements – a crude approximation to fairness for the poor and middle class, and of no consequence for the rich.
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Is this the expected outcome of a functioning democracy? Of course not, the sacred status of the right of a minority to charge rents to the rest of us is itself a symptom of a more fundamental malaise. We live in societies that are ‘democratic’ only in the sense that it is an improvement on various kinds of despotism that existed before. This democratic deficit is the root cause of the deep unfairness manifested in our governments’ internal and foreign policies. The root cause of state terrorism abroad, and of systemic exploitation at home, is the same. Addressing this root cause will simultaneously address injustice everywhere is our society. This seems so very clear to me, yet there is a peculiar resistance to the idea amongst my fellow Brits. Some kind of post-imperial complacency, perhaps.
@ Peter Neary-Chaplin
That’s a bet I’m sure you’d lose.
Care / Nursing homes vary so much is standards as to almost defy categorisation. Some are superb, many are dreadful.
Down t’ pub we all agreed we’d prefer to die penniless in fragrante delicto – the best holiday destination, where do I book a flight there?
Who says we will have any money left by the time we pop our clogs? My energy supplier has just upped the monthly payment by 25%. You go into the supermarket for a few essentials expecting the bill to be £10 and they ask for double that. And we have not seen anything yet IMHO.
Craig is wrong on his assumption that none of us have seen inside a care home. I looked after my mother after my father died. This coincided with us finding a house here with a downstairs bedroom and bathroom when my late husband’s job moved. Eight years passed by as her condition gradually failed and for the last year of her life, we found a nursing home for her as I could no longer cope with her confusion and double incontinence. As far as I remember the annual cost then was £25,000. It is probably double that now. I would not have changed anything but it was a socially isolating and sometimes lonely experience and we did not have proper holidays for a long time.
They are having a debate in the HoC now. Lansley speaking.
Mary,
sorry, it was Peter who was assuming none of us have seen a care home – I was betting everyone has – my reply to him got into a clumsy double negative
Evgueni, I agree.
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Mary: …and who says that any money we do have left will actually have any value by then?
You are arguing, in effect, for a means test.
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Would it apply only to the individual receiving care, or would a spouse, ex or otherwise, be liable to cover part or all of the bill? And what about millionaire children? Traditionally, care of the elderly was a responsibility of children. How about responsibility for payment of publicly provided care facilities?
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And if there is to be a means test for those receiving care in old age, why not for all health services, educational services, etc.?
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The issue that arises if services are means tested is that you have a two-tier system. The rich will go to nice care facilities (they will look nice, anyway) and the poor will go to crap public facilities.
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A related question is the kind of care that people receive in care facilities. In North America, it seems that those who begin to lose their marbles are heavily sedated, often with off-prescription antipsychotics, which serve as a chemical straightjacket. In the elderly, these drugs are said to have the effect of shortening life expectancy by about 50%. Several major drug companies have been fined millions for encouraging such drug use.
Circumstantial evidence suggests that the same technique of subduing the elderly in care is employed in Britain.
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Perhaps a better solution is to strengthen families and provide financial assistance in the form of tax-breaks, income supplements and in-home assistance, so that conscientious people such as Mary can cope with elderly parents more easily.
I looks like I will never be able to afford a home in my own country, but I will have to pay more tax to fund old people so they don’t have to sell theirs to fund their own care.
It’s a joke. There’s a big storm coming. Batten down the hatches.
The direct answer to your question “why die with money?” is this.
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Public services are paid for by taxpayers, and in general wealthier beneficiaries of such services have contributed more than an equal share to their cost. Therefore, there is no particular reason why the relatively wealthy, or their heirs, should pay again when they derive a benefit from such services.
Thanks Craig. No offence taken or intended. I did not read the foregoing comment to yours carefully enough.
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Reform of Social Care = today in the HoC – half way down page
http://www.publications.parliament.uk/pa/cm/cmtoday/cmdebate/03.htm#d2e1839
Off topic. Why did he leave the base alone?
4 July 2011 Last updated at 19:11 BBC website
Missing UK Afghanistan soldier is found dead
A British soldier who went missing in Afghanistan has been found dead, the Ministry of Defence has said.
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The soldier, from 4th Battalion The Royal Regiment of Scotland, was found with gunshot wounds by a patrol which had been searching for him.
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A major search was launched after he left the base alone in the early hours of Monday morning, a move which was described as “highly unusual”.
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The soldier’s next of kin have been informed.
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The Taliban told the BBC it had killed a soldier in the area.
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Cameron was visiting there today.
@evgueni, interesting contribution, thanks. And congratulations on the arrival of the new rugrat too – read your thorough post on the other thread, but just been too headless-chicken to respond over the last week. Apologies.
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I think you underestimate Brits – certainly intellectuals – when you say that they are resistant to your idea. It has a lot going for it, and – despite our differing views on the merits of non-competitive economic systems – I spy direct parallels with Marx’s ownership of production. Of course, popularising such a meme to Joe Bloggs given the mental constraints placed upon him* will be difficult, but that’s not due to features of your idea; it has always been thus.
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(* I’ve mentioned it before, but it’s worth restating: IMO, any blue-collar Joe/Joanne Bloggs of average state education could turn his/her hand to understanding the detailed workings of the UN, or proposing his particular solution to the Middle East crisis if he/she was passionate about doing so. However the media-political nexus persuade people most effectively that it is way above their capacity and station, and that it should be left to important people. No wonder people feel disenfranchised.)
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Are there any progressive economists proposing your view, that you’re aware of?
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I would probably amend your earned/unearned distinction a little. For example, a senior banker may pick up several million in wages, and yet I would regard much of this as unearned, even though it has not been generated through the unnatural monopoly of land ownership. In today’s environment, I would imagine some such bankers would in fact be taking unearned wages that actually originated from the taxpayer, as a bailout.
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That particular dilemma, as well as earning unearned money from rentier activities, I think would be solved quite nicely via Participatory Economics. Still, as indicated earlier I am not stuck on any one proposal, and certainly would be open to an expansion of yours. I’d not considered the idea that an individuals wealth could be split according to how much of it was legitimately earned before, so thanks. Excellent food for thought.
Again off topic. But this latest revelation of the behaviour of one of the tentacles of the Murdoch empire revolted me greatly. I am sorry for the distress which has been caused to Milly’s parents and family.
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Missing from Lenin’s account here is the connection of Cameron to Coulson (who lied to a HoC committee on the hacking matter) and the fact that Hunt is said to be rubber stamping the takeover of BSkyB by Murdoch. How low can we go?
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Predator
http://leninology.blogspot.com/2011/07/predator.html
Incidentally evgueni, I hope to be able to respond to you – perhaps in a few months! – about whether the competition element is viable even in a tightly regulated and highly democratic capitalist environment. I’m reading a book on Marx at the moment, and the author Chris Harman – admittedly not an unbiased source – seems to be suggesting that no-one has come closer to explaining the dynamics of the system since Marx. (Even the study textbooks for capitalist economics courses apparently admit that they are making assumptions that only work in theory, or if the time aspect of an equation is ignored.)
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The critical item about competition is that it adds a pressure on all capitalists within a particular industry in a drive to the bottom. Now (if my understanding is correct) this would be okay if markets always “cleared” i.e. all sellers could find a buyer. But since they cannot always do so, bubbles become trapped in an increasingly chaotic system that find periodic reset in the system’s inherent “boom and bust”. I am just reading a fascinating section on how the capitalist class is paradoxically parasitic upon each other in a downturn – the drive to increase surplus value can be achieved by purchasing the goods and machinery of a bust competitor at knock-down prices. That transfers someone else’s surplus value to oneself, presumably reducing the need to take other drastic actions for a while – such as sacking workers or reducing their wages. The process can act as a safety-valve in a shallow downturn, but isn’t sufficient to insulate the wider economy in a meltdown.
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The question of course in the context of our discussion is whether or not a highly functional democracy would be sufficient to *perpetually* trammel the most destructive of these features.
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Whether direct democracy will work in itself is another matter, of course. As Craig has previously mentioned, direct democracy would probably be dangerous now, given the militarism and racism that might stem from a popular mandate. Even amongst a highly educated and intellectually aware working class, I am not sure we can entirely avoid the tyranny of the majority.
Techno, here’s a house you could surely have afforded! Could probably have bought it on yer credit card.
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Quiet neighborhood, too, it looks like. Most houses boarded up, so no immigrants, if that’s a concern.
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How, incidentally, do the Commies here, Evgueni, Jon and Clark think the elderly are supposed to support themselves if not with unearned income?
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And in that connection, why since communism is a verified route to poverty, do they advocate it?
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Do they like poverty, such as the Chinese enjoyed under Chairman Mao, and the Russians under Lenin and Stalin? Or do they think that they have, in defiance of the laws of economics and psychology, figured out how to ensure all good things happen to everyone equally?
“Direct democracy would probably be dangerous now, given the militarism and racism that might stem from a popular mandate”
Ha, Liberals for totalitarianism!
CanSpeccy – a very secular bless! to your assumption that I am a communist. I have never called myself such a thing.
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“Can communism work” is an excellent question, though. I am minded that it might be able to, but that most existing examples – as you rightly point out – did not work. However, I am uncertain as to whether hierarchies of soviets (i.e. workers’ discussion fora) would be accepted as sufficiently democratic to a populace grown up on a multi-party model, which I think might be my personal sticking point anyway.
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I have heard it proposed that the failure of communism was its tall hierarchical model that gave rise to as much inequality as capitalism: control was centralised towards the top of the pyramid, corruption and nepotism spiralled, and only a few people benefitted. The radical thinker Michael Albert, himself not a communist afaik, has proposed that a job rotation system – intended to flatten out the shape of the democratic pyramid – might have saved it. I can probably source you a link if you’re genuinely interested in this.