Theresa May has decided to attack older people, who she thinks will vote for her come what may. She is not only scrapping the Triple Lock on pensions, along with the Winter Fuel Allowance, and setting up further large rises in taxes to pay for the economic crisis that will follow Brexit, but she is also proposing to introduce a Death Tax on the estates of older people who have the misfortune to suffer with dementia.
This tax does not affect you if you have heart condition in old age, or suffer from cancer, when you will still be entitled to go into hospital and be treated for free, and receive the long term care for those conditions you need. It only affects you if you become confined due to dementia or Alzheimer's, and need full-time care either in a care home, or in your own home.
For a long time it has been the policy of government and of Social services to try to get elderly people to remain in their own homes rather than go into care homes. The reasons given for that have been framed in terms of providing dignity in old age and so on, but the real reasons were about cost of providing good quality care homes and provision for the elderly. The experience of many elderly people with care homes itself encouraged them to want to avoid them and stay in their own home. But, there is no reason why elderly people in this country should not enjoy the same kind of retirement villages, and care facilities that many elderly people in the United States enjoy, when they retire to Florida, and other states with climates more suitable for the elderly.
However, as a result, many elderly people in Britain to stay in their own homes, and have care provided for them, usually by a mixture of care from their families, and by social services. Up to now, the value of the family home was not included in your assets in calculating whether you should pay for the state care provided in your home. Now it will be down to £100,000. That means that many people whose only asset is the house they live in, will find that they have to pay for the support that previously they obtained for free. The Tories say that no money will have to be paid until after you are dead, with the money coming out of the estate. In other words, this dementia Tax, is also a huge Death Tax, being imposed on hundreds of thousands of elderly people, and their families who for years provide them with free care and support in their homes, and receive nothing from the state for doing so.
The Tories say that it means that at least £100,000 will be available to be passed on from the value of the home, but that does not change the fact that many people will be paying out hundreds of thousands of pounds, which currently they do not. The Tories have tried to phrase this in terms of it being fair, because it is those who have benefitted from sharply rising house prices who will pay the most. This again is crass, and wrong.
The average house price across the country, according to the estate agent indices is £250,000. That means that even if those paying the dementia tax have no other assets, they would be liable to pay up to £150,000 in care costs. In many places, house prices are more than that, so the care costs would be potentially much higher. Its true that those most affected by that will be those whose main asset is their house, and whose house price has inflated astronomically. But, there are two things about that, the most wealthy in society do not have the majority of their wealth in the form of their house, secondly, whilst some elderly people have benefited, on paper, from the astronomical inflation of house prices, it provides them with no actual tangible benefit, and moreover, their children have suffered as a result of that same rise in house prices.
The really rich do not have the majority of their wealth in their home, but in shares, bonds and other revenue producing assets. But, even for those moderately rich people who do have a lot of wealth tied up in their home this is not likely to affect them too much. In the village where I live there are several properties that have been up for sale recently for prices between £1 million and £3.5 million. Even if your care costs came to £300,000 that still leaves you with £600,000 on the £1 million home, and £3.2 million on the more expensive. But, for the average person, a £300,000 bill would more or less wipe you out. And, indeed, someone buying the £3.5 million house, which had an attached horse racing circuit, and stables, would be likely to have even more of their assets in shares etc.
These kinds of rich people can not only afford care costs, as only being a small proportion of their revenue from these assets, let alone as a proportion of their wealth, but their lawyers and tax accountants would have ensured that these assets were placed in trusts for the children so as to avoid any question of the estate having to pay any Inheritance taxes, or charges against the estate. It is once again the ordinary working person, and middle class person that will suffer whilst the Tories ensure the really rich benefit.
For the majority of people say in London and its environs where house prices have risen ridiculously, the one thing that has enabled those prices to remain high, and allowed some younger people eventually to buy a house, is the fact that when their parents died, they picked up a house, or they inherited the proceeds of the sale of the house. One good thing of the Tories Dementia Tax, would be that if the value of all London houses was swallowed up in paying for care costs, there would be nothing left in estates to be passed on for children to use as deposits etc. to buy those houses at their current inflated prices. It would thereby fairly quickly burst the London property bubble, and with it the property bubble in the rest of the country.
However, in the meantime, it would be all of the younger people who have provided free care and support to their parents, who would immediately suffer from that, as their one hope of being able to afford a home, via the inheritance of the proceeds of their parents home disappeared into thin air.
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