Feb. 11 (Bloomberg) -- Prime Minister David Cameron’s government will fund planned improvements to financial support for the elderly in England by raising more money through inheritance tax, Health Secretary Jeremy Hunt said.
The amount any individual pays for care in old age will be capped at 75,000 pounds ($118,000) before the government steps in when the measures come into force in 2017, Hunt told lawmakers in the House of Commons in London today. People with assets of less than 123,000 pounds will receive help sooner. The government’s aim is to encourage wealthier people to take out insurance or use pension products to cover the 75,000-pound cap.
The extra cost will be partly funded by extending a freeze for three years until 2019 on the level at which people start paying inheritance tax on estates at 325,000 pounds, Hunt said.
“For too long, the issue of social care has been ducked by successive governments, leading to an unfair system that has seen people selling their homes and losing nearly everything they’ve worked for to pay for their care,” Hunt said. “These historic reforms will give everyone the protection they want in their old age and save the family home.”
The policy is based on a 2011 report by Andrew Dilnot, a former director of the Institute for Fiscal Studies. He recommended a cap of 35,000 pounds on what people paid and said his plan would prevent people spending more than a third of their wealth on care costs instead of as much as 90 percent under the existing system.
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