Care Fees and personal taxation

[Richardw]

Hello All
Please take a little time to sign my campaign to stop taxation of people living in care and paying the fees. I was shocked when I discovered that HMRC treat the income of people living in care the same as those living a normal dementia free life. I have lobbied my MP but have not received much encouragement

Unfortunately this forum will not allow me to post the link to my change.org petition but this is named "stop taxing people who live in care homes".


Thank you for your support

 

[oilovlam]

One 'problem' is that the super rich would find a way to use it to avoid paying tax. They would probably declare their home in Bermuda as a care home.

Perhaps there could be a reduced tax rate on certain levels of income or even a tax refund (sort of like a government contribution to the care).

But this issue is just one of the 'problems' with care home funding. It needs to be looked at in depth....really organisations like Alzheimer Society should be pressuring for a review of care home funding and social care in general (perhaps they are).

Care homes need to be more affordable and the local authorities (central government) need to be paying their fair share....rather than getting self-funders to keep the system going.

 

[Richardw]

I wouldn't class someone whose pension adds up to more than £11k as super rich and I don't think in the scheme of things that the tax the government is taking is significant as by far the majority in my dads care home don't pay. The system is completely broken due to the impending dementia tsunami. It is the luck of the draw or genes as to whether you are able to pass anything to the next generation. I agree that the whole thing needs looking at but this is an obvious injustice that should change. I hope you can support my campaign

 

[Bunpoots]

I agree the system of care home fees is very unfair to self-funders . Not only are they paying tax towards the fees of those who get their places paid for them but they also have to pay extra for the same care as councils do. Double whammy!

It certainly needs looking at.


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[oilovlam]

I've been thinking about this a little and I don't think I understand it enough. Could you explain how paying less (or zero) tax whilst in a care home would help? Tax after all is a necessary evil that keeps the system 'almost' working.

Once savings fall below £14,250 the LA takes all income and tops up that money to pay the care home....which sometimes isn't enough & family are asked to contribute. If you didn't pay any tax on that income then the LA top-up would be slightly less. It doesn't benefit the person in care in that scenario.

If the person is self-funding then paying no tax would help them....but when people have private pensions they get tax breaks whilst paying in, so it is only fair that they pay tax when they take the money out of the pension.

I'm no expert in taxation or LA funding of care homes but I would like a bit more explanation before I sign a petition.

 

[Saffie]

I agree the system of care home fees is very unfair to self-funders . Not only are they paying tax towards the fees of those who get their places paid for them but they also have to pay extra for the same care as councils do. Double whammy!

It certainly needs looking at.


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This applies to everything in life. People who pay no council tax have access to exactly the same local authority services as those who do so. People who pay no income tax are not deprived of the government services top payers receive such as NHS.
Life is never an even playing field.

Also - yet again - nobody in a Care home gets 'their places paid for them' unless they receive NHS CHC funding and this applies to both self-funders and those whose fees are supplemented by the LA.

 

[oilovlam]

I found the petition on Change.org (shame they wouldn't let you create a link here). I'm hopeless at searching for things. I did find that if you do a search using quotation marks then you will find it quickly. Put the following into the search box:

"stop taxing people who live in care homes"

(The quotation marks are important, if you don't you will get more than 900 responses and it is like looking for a needle in a proverbial)

 

[Pete R]

(shame they wouldn't let you create a link here)

I don't think it's anything sinister, just that the OP is new to the forum. Helps prevent spam.

 

[la lucia]

The system is completely broken due to the impending dementia tsunami.

The statistics for dementia are not exactly what was expected and thus words like 'pending tsunami' are not really useful. There have now been multiple studies across the pond, in the UK and in Spain that suggest things are not as bad as originally imagined.

While jury is still out due to methodological issues, we also have increased abilities for diagnosis.

Plus I'd argue that a significant, although not total, reason for the chaos of social care, is of course, political.

 

[Richardw]

If the person is self-funding then paying no tax would help them....but when people have private pensions they get tax breaks whilst paying in, so it is only fair that they pay tax when they take the money out of the pension.


I agree that you get tax breaks on the way in but I would not agree that it is fair in the case of people in care to continue to tax pension and savings income. Generally people build up savings in the expectation that they can pass it to the next generation(s). Certainly I am, and I am sure my Dad did. The rate at which you chew through savings when in care is horrendous. The taxing on top is unfair in my opinion. Many of my friends are setting up to run out of money and fall on the state if necessary, precisely because of the cost of care. In my view the system needs looking at and maybe I am tinkering here but it's an issue I feel strongly about

 

[Saffie]

Leaving money to the next generation is all very well and we would all like to be able to do this but it is not what earnings are actually about. For the majority of people earning money is about survival in the present day not passing on the earnings to those who have not worked for them. Savings, for those that are fortunate enough to have them, are surely to allow people to live in relative comfort in old age. Likewise, taxation is to provide services everyone has need of now.

To expect the state to subsidise one's care in order to pass on our savings seems a little immoral to me. If you are concerned that your children and grandchildren may struggle financially then help them now when they need it. It is what I do.
There are many, many threads here about losing one's inheritance - though avoiding tax is a slightly different angle - but it isn't an inheritance until the person to whom it rightfully belongs no longer has any use for it.

 

[oilovlam]

.....Generally people build up savings in the expectation that they can pass it to the next generation(s)......

Richard, I think there are people who may not agree 100% with your statement. I think people save so they can 'enjoy' themselves when they are older. They have money for heating, money to keep the house in order, a holiday....things like that. If they have more then they need they may leave some money in their will....but that is not 'guaranteed' money. If they wanted to leave money to the next generation they would create an investment (a 'trust' perhaps) for the next generation that was definitely for them.

I think your frustration with the tax system should be targeted at the cost of care for self-funders. They are subsiding the system through high fees because the LA (actually central government) under funds.

Tax is a necessary evil. If everyone stopped paying tax where would we be....oh, I know...Greece

 

[Saffie]

Tax is a necessary evil. If everyone stopped paying tax where would we be....oh, I know...Greece

.....but without the sun!

 

[jaymor]

If the person is self-funding then paying no tax would help them....but when people have private pensions they get tax breaks whilst paying in, so it is only fair that they pay tax when they take the money out of the pension.


' Many of my friends are setting up to run out of money and fall on the state if necessary, precisely because of the cost of care.



I hope when your friends are ready to fall on the state there is something there for them to fall on.

There are less and less putting into the system and more and more taking out. You don't have to be a genius to realise the landing will not be a comfortable one for them

 

[Richardw]

Hmmm..... not sensing much support here which has surprised me. Arivaderci all

 

[oilovlam]

Hmmm..... not sensing much support here which has surprised me. Arivaderci all

Richard, sorry to see that something you feel strongly about has fallen on deaf ears. Perhaps we are just happy with the status quo. Personally I think the real problem with care home funding is elsewhere.....or personal taxation could be a part of any solution.

Perhaps you need to get a 'celebrity' to get on board. Martin Lewis of 'MoneySavingExpert' may be willing to look at the issue with his razor sharp financial mind and if he were to become an advocate then you may get somewhere.

 

[Pickles53]

I would say tax is the price you pay for living in a civilised society. We all pay for services which we may or may not need personally but which are beneficial in a broader sense. What's the alternative? Few of us would be able to earn enough to pay for everything we need if the state wasn't there to provide schools, roads, hospitals, etc.

I find it frustrating that too many of my fellow citizens are very reluctant to pay into the system but then expect someone's else contributions to bail them out when the crisis comes along. If your friends are planning to 'fall back on the state' who do they think is providing that support? The government has no money of its own.

My parents didn't save so we could have an inheritance and I wouldn't want them to. They saved to have money for a rainy day and for them to have a better life when they were older. We are all capable of earning our own living.

 

[Saffie]

I would say tax is the price you pay for living in a civilised society. We all pay for services which we may or may not need personally but which are beneficial in a broader sense. What's the alternative? Few of us would be able to earn enough to pay for everything we need if the state wasn't there to provide schools, roads, hospitals, etc.

I find it frustrating that too many of my fellow citizens are very reluctant to pay into the system but then expect someone's else contributions to bail them out when the crisis comes along. If your friends are planning to 'fall back on the state' who do they think is providing that support? The government has no money of its own.

My parents didn't save so we could have an inheritance and I wouldn't want them to. They saved to have money for a rainy day and for them to have a better life when they were older. We are all capable of earning our own living.

A perfect post. Thank you Pickles.

 

[istherelight?]

Hi Richard

I've just posted on a thread "Care Homes" and am off to find your petition (didn't see your thread before).

Whilst I don't personally think about inheritance, I do think it wrong that she is subsidising the government as a self-funder, and, if we rent out her house, the net income will be taxed. A double whammy!


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[Richardw]

Thanks "istherelight" for your support. I was beginning to lose hope on here. I maintain that if the Government think that people will save for the care system then they are living in cloud cuckoo land. There are less than 20% of the residents of my Dads home self funding and the system does not encourage you to do so as you get the same care whether you pay or not. I am not campaigning about that though, I have chosen a more achievable goal.