Re:State calls for new Later Life Care Fund for older people’s social care

A new model for funding later-life social care has been proposed by thinktank Re:State, with the aim of improving a system that is ‘unfair, unsustainable and no longer fit for purpose’.

In report released this month, entitled Beyond caring, Re:State recommends the adoption of a prefunded social security model,  in which adults would be required to contribute to a national Later Life Care Fund from the age of 34. This money would then be invested in order to keep up with rapid increases in care costs.

The model also foresees a ‘triple guarantee’ of protections, comprising of an annual personal care allowance, a means-based progressive co-payment system for those who need more intensive care, and a protected asset floor of £75,000.

Dr Simon Kaye, co-author of the report and Director of Policy and Research at Re:State, said that his team had “known for a long while that [they] wanted to do a radical piece on social care”.

He said: “Adult social care is collapsing, with deep intergenerational, socioeconomic and geographic injustices now hardwired into the system.

“We don't tend to encounter the system until we, or someone close to us, has need of it - and then we suddenly notice that it's broken. And it's broken because of how much longer we live than when the current system was devised.”

The new report argues that separating the funding streams for working-age and later life social care, rather than treating them as a single policy problem, is crucial to creating a sustainable system. This is in part due to the predictability of the need for later life care.

“That makes it a kind of insurance problem, which means you can come up with a system that lifts the whole thing out of general taxation and is genuinely pre-funded”, said Dr Kaye.

The report also contains a proof-of-concept model which was stress-tested in various scenarios, to demonstrate the viability of the proposal.

While the adoption of this new pre-funded model would take place over an extended period of time, the authors argue that those near or currently in retirement should pay more towards this system through policies such as an expanded deferred payment system, National Insurance tax on pension-age earnings, and the use of a high-value property levy to fund the transition.

Dr Kaye said: “The social care system's collapse has knock-on implications for everything else that's going on in government and public services.

“You can't expect the NHS to perform better if the social care system isn't doing its job of preventing a lot of the need for hospitalisation or creating routes out for people who've had treatment to keep the whole thing moving. Similarly, you can't expect local public services to work well if councils are having to plough ever greater sums into just barely keeping up with social care demand.

“If you could implement something like what we propose in our report, you'd create a lot more confidence and clarity about what happens to people when they have care needs in their later life. You'd have a more sustainable system that isn't bankrupting the State. It'd be fairer.”