NO JOY IN OLD AGE -- Return of the Death tax?

Who is watching over her?

I read Sunday's Observer with horror and dismay, when some of the proposals of Andrew Dilnot"s report on the funding of social care for the elderly were revealed. Middleclass people would have to fund the first 35k of their social care costs themselves , but they can always take out insurance to cover that 35k cost. I can just imagine the insurance industry rubbing its hands in glee --trying to ensure that it meets its social care insurance sales targets.

If someone needs residential care and has more than 23.25k in savings,capital or assets then they have to pay for the care themselves. This is exemption limit is not a great deal of money in reality but it means that the costs of residential care would fall on you. I know from personal experience that when my friend's father went into residential care, his house had to be sold to pay for the bills, the irony of it was that the buyer of the house was his own son. Therefore a house which he had bought over so many years, was sold to pay for his care costs and he could not pass the house down to his own son. Whilst his son, had to purchase the house he had lived in as a child, from his father. The father was upset that he could not pass on his house to his son and was annoyed with himself for being ill and depriving his own son of his inheritance. It is very disturbing and worrying for older people who have given so much to society to be put through this type of process.

Maybe insurance might be the answer but why should certain older people be penalised for being thrifty and careful with their money.

This is a difficult problem as the costs of social care finance are rising considerably and more and more people will need it, the 23k threshold could be increased but then the cots of social care support would increase as well and probably by more, Perhaps we need to do the following:

1.Raise the threshold of eligibility for social care support so that the richest in society will pay a larger percentage of their own costs -- the level could be raised to #75k or even more. They would only get support after the first #75 has been funded from their own resources.

2. There could be different exemption levels for different bands of people with the poorest having to fund little or no amounts of their own social care costs.

3. Tax relief could be given on any contributions to a savings plans for future social care costs

4. A proportion of any pension fund could be set aside to cover social care costs

5. Everyone could be given a one off endowment from the state which they could invest for future growth to fund social care-- If they do not need it then they can return all or part of it to the state or use it to fund a family member's social care costs -- The fund could not be used for any other purpose.

6. A proportion of everyone's income could be put into a national social care fund which would fund social care on a national basis.

These are just some ideas to make a death tax more palatable.

Which method might you choose?