The Right to Buy – A Solution to Funding Care of Older People?

What do people who need to enter residential care fear most? Losing the home they have worked for the best part of their lives? Separation from their spouse they have shared a bed with for decades? Going to a place where they know they are going to die?

At a time when a person is at their most vulnerable we force them away from their families and potentially destroy their treasured legacy for their children and grandchildren. So let’s be clear, caring for the elderly and keeping them safe as they become frail is more than just a financial crisis, but the solution to both is in how we construct the care budget.

70% of residential social care, and 50% of residential nursing care, is taken up by accommodation and hotel costs. We insist on including these costs in the “care” budget, forcing people to sell their homes to fund this forced move into rental accommodation. It is no accident that many care providers are housing organisations. If the person was being cared for in their family home then these non-care costs would be met, without question, by the individual.

So here is my suggestion. We should make the individual responsible for their accommodation costs and let the state deal with the care. If the person is in rented accommodation and receiving housing benefit then continue this arrangement. If the individual owns their home give them the “right to buy” their care accommodation.

This, in a single move, would bring some of the country’s “wealth” to bear in solving the funding of residential care and would allow the individual to retain their capital asset to pass onto to their children. As in any market with choice, it will also improve the quality of the accommodation, including expanding the number of units that can take couples.

I have included both nursing and social care because I do believe that it is a nonsense that for those who win the lottery of gaining nursing care, they receive free accommodation and food as well as the care. I am sure that the electorate would be more than happy to pay the non-care costs in the case of residential nursing care as long as the care costs of residential social care then becomes a service free to all.

It’s worth mentioning that as well as unlocking the housing wealth of the boomers this would also unlock family homes for the younger families following them.

* Following a career in the Royal Navy Steve has worked at a senior level within health, local government, criminal justice and voluntary sectors. Wilts County Councillor (1989) and NW Leicestershire District Councillor (1995)

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18 Comments

  • When a person goes into residential care they can only keep a small part of their income according to Age UK this is £24.90 a week the rest of their income will go towards paying for the residential care if this costs more than that the rest of their income.

    Therefore, Steve do you known how much it costs to have a 24 hours a day live-in carer and how much a person can keep if they have such a person? I remember that my mother’s live-in carer was entitled to have a certain amount to cover the cost of their food (I can’t remember if it was £20 or £40 a week). Steve do you know how much it costs to live in a residential care home? If you do not know these figures how can you judge if it would be cost efficient for people to stay in their own homes or not?

  • This has always been a childrens’ greed issue which we are not allowed to discuss.
    If you are going into a care home why would you need the “home you are losing and have worked for”?
    It’s just going to be empty isn’t it?
    The bellyaching comes from the offspring who want the state to pay for mum and dad and they get the house.
    Your idea is a good starting point but why should the state pay for care if the old person can afford it?

  • @palehorse.
    Why should the star pay for care if the old person can afford it ? Well I suppose for the same reason that we don’t means test a whole range of benefits, the NHS, pensions etc. Secondly because it would encourage people to be feckless and ensure that they had blown the lot by the time they needed care and then they could throw themselves on the mercy of the state. Finally because the idea of passing what You have down to your kids is both a natural human instinct and an idea with a great deal of political and electoral power.
    We need creative thinking, not just clobber home owners, and Steve’s piece raises interesting ideas.

  • State, not star…obviously.

  • Andrew Toye 5th Oct '17 - 5:59pm

    This seems to be a re-packaging of what exist already. Anyone has a “right to buy” home or residential care with their own money whilst keeping their own house – the problem is that the money rapidly runs out and you then have to sell the house to buy continuing care – then the proceeds of that run out and you’re reliant on the Council. As with any economic “right to buy”, it only exists if you have the money to pay. What is needed is a social care addition to National Insurance to spread the costs.

  • Chris,
    We really need that creativity. The ‘state’ is us and we have run out of money. We won’t be able to afford the care we would all like to enjoy. Old folk don’t die young any more, their bodies can be kept alive long after they lose their ability to fend for themselves and they need incredibly expensive care for year after year.
    What’s the alternative? Ruinous tax rises for all of us so some kids can protect their windfalls?

  • “What’s the alternative?”

    Encouraging people to die sooner.

  • William Fowler 6th Oct '17 - 9:09am

    The whole system is busting council budgets at the same time as council tax is far too high a tax for many related to their income… break the system by allowing individuals to “import” their nursing care direct from third world countries, offering free accommodation in the individual’s home and three year contract to qualified nurses with tax free income direct from the person they are caring for. At the moment huge chunks of the cost goes to agencies whilst the actual carers can barely get by on their income.

  • Peter Hayes 6th Oct '17 - 1:06pm

    My parents sold their mobile home bungalow to move into a 2 person flat in a charity run home. Because they had cash in hand they had to pay full rent plus got nothing for the council provided nursing cover for my mothers dressings. My father ended up having to move to a dementia home run by the same charity and eventually died there, all paid for thanks to my mothers financial skills. Finally Mum was in hospital and after several months I was called to a discharge meeting. No question of going home but to another home with 24/7 nursing care. The social worker said Mum still had enough to be self funding, no mention of nursing costs. I don’t care about inheriting anything but their funds would have only lasted 6 months before they dropped below the self funding limit. Mum died a few weeks later. So a middle class family had enough for a decent retirement but about someone delivering on a zero hours contract?

  • Simon Banks 6th Oct '17 - 4:41pm

    Palehorse – this is not how most old people think. They want to be able to hand over the house. What if the house is owned by the old person, but a son or daughter lives there? What if the old person enters residential care but unexpectedly improves and is fit to live at home again?

    There is money to be saved in the health and social care system. When my mother was in hospital and fit for it, she got physiotherapy. On discharge the physiotherapy stopped and it was weeks before someone visited to set sessions up again, during which time her mobility had declined. Same thing happened after a short readmission for an issue unrelated to her mobility problems: the physiotherapy was automatically cancelled and took weeks to reinstate. After another brief admission, she got home three days after she was declared fit to go home purely because the hospital failed to co-ordinate with the carers. In other words, because of a multitude of barely-communicating agencies and a focus on doing the job by the rules rather than on doing some good for people, opportunities are wasted and health declines, which is expensive.

  • Simon,
    “They want to be able to hand over the house.”
    Quite so but I only try and point out the reality of the situation. 24/7 care of 90+ and 100+ year old severe dementia sufferers is extremely expensive.
    So = large tax rises for all. Those who aren’t expecting a windfall inheritance may resent watching this come from their pay packet effectively to protect the legacy of some lucky children.
    The state generally expects those who can provide for themselves throughout life do so while it looks after those who can’t. Those who have the ability to support themselves do so. Why should that stop so that the children can inherit loadsmoney?
    My father in law was in a care home in his latter years (paid for by the sale of his house – we wanted him in quality care and felt his savings were there for that – not us).
    I have to say that neither he nor the other residents showed the smallest sign of unexpected improvement being likely!

  • @ William Fowler

    The idea that everyone needing care can recruit someone from a “third world country” is just plain silly. I imagine it is a difficult and complicated thing to do. This is why there are care providers to do this. You are correct the wage these live-in carers receive is low, but the correct policy is to increase the National Living Wage for everyone and if we keep the Income Tax Personal Allowance increase it so no one earning just the National Living Wage pays Income Tax.

  • The idea that everyone needing care can recruit someone from a “third world country” is just plain silly.

    Micheal BG, I agree with you, however many who believe that we need unsustainable levels of immigration to keep the NHS running, might not. Ie. ‘everyone’ also includes government and public service organisations.

  • Catherine Jane Crosland 7th Oct '17 - 11:00am

    If a young or middle aged person has cancer and needs hospice care at the end of their life, no-one suggests that their house should be sold to pay for the costs of their care. They are not required to pay for the costs of their care at all – hospice care is free for everyone, whatever their financial circumstances – rightly so. And the care someone receives in a hospice is likely to be better in every way than the care received by an elderly person in a care home.
    In an ideal world, care homes for people with dementia would be similar to hospices. The same automatic entitlement to free care. The same excellent standards of care, with a focus on enabling residents to live the life that is left to them to the full, meeting not only their physical needs, but their emotional and spiritual needs as well.

  • Catherine,
    It isn’t “free”. It comes from taxes. The difference between the young person in a hospice and elderly care is simply scale. Medicine’s ability to keep the body going is creating a massive cost in care and while”taxpayers” may happily pay for the tragic young they will baulk at big rises so that the son a daughter can split the million pounds between them.
    I appreciate your sentiments and there would not be a problem if the costs were small.
    But they are already too big and getting relentlessly bigger. This isn’t an easy problem to solve and “make all elderly care free” may not be as acceptable as it sounds.

  • Before 1979 the standard rate of income tax was 33%: it is now 20%. Margaret Thatcher and subsequent Prime Ministers bought votes by cutting direct taxation, and the problems we have today in funding social care and higher education, to name but two areas, are a consequence of politicians conning the electorate into thinking it can have its cake and eat it. Had the proceeds of taxation on North Sea oil been invested in a Sovereign Wealth Fund instead of being used for short-term electoral bribes then we might today be in a position where we did not have to make such difficult choices. But since when did any politician look beyond winning the next election?

  • Catherine Jane Crosland 8th Oct '17 - 9:52am

    Palehorse, I know it’s a complex issue with no easy answers. I wasn’t suggesting that care for elderly people with dementia should be funded exactly the same way as hospice care is currently funded.
    Perhaps hospice care should not have to be funded the way it currently is. Hospice care is only partly funded by the the NHS. Hospices also depend, to a large extent, on charitable donations. But hospices do manage to provide a very high standard of care, and are usually able to offer a place to anyone who needs one, and there is never any charge to the patient.
    I suppose the point I was trying to make was that we take for granted that hospice care ought to be free of charge, and there would be an outcry if it was suggested that a young person dying of cancer ought to fund their own care. So shouldn’t the same principle apply to an elderly person with dementia?
    Also I was trying to suggest that care homes should resemble hospices much more, in the quality of care provided, and in the philosophy that even if someone has a terminal illness, they can still live life to the full in the time that is left to them. Sadly, care homes usually seem to do little for residents beyond meeting their physical needs – and even even in this they often fail.

  • Peter Hirst 9th Oct '17 - 11:32am

    We all deserve some basic level of care when we cannot any longer look after ourselves. That should be provided by the Government. Above that, choice is important. A variable insurance scheme would seem best. I would take assets and income out of the equation and tax them separately.

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