Dementia? Let’s go to Easter Island! – Planning for long-term care

Antony Mason responds to the recent announcement about long-term care for the elderly

It has taken the Law Commission to reignite the debate about long-term care of the elderly. The current provision of social care is so inconsistent and chaotic that the elderly and the infirm (and their carers), in desperate need of support, have had to resort to the law to obtain provision to which they are entitled.

On 11 May the Law Commission announced its intention to try to reform the social care system to provide a single coherent framework, backed by an independent care tribunal. This announcement was endorsed by Andrew Dilnot, Principal of St Hugh’s College, Oxford (and future Warden of Nuffield College), who called the current system “a mess”.

He should know: he is also the Chairman of the Commission on Funding of Care and Support, which is due to report in July. Set up by the Labour government, its task is to review (within its broader remit) the options for an increasingly urgent problem: the long-term care of the elderly. As he put it, “With more people living longer, we urgently need to find a fair and sustainable way to pay for the care which many of us will need. There are not going to be any easy answers, and I know difficult decisions will have to be made.”

Like: who should pay?

All political parties agree that the current situation is unfair: the elderly who go into long-term care often have to sell their homes to pay for it, and can see their entire fortune and savings reduced virtually to zero before the state will step in. Those who have neither house nor fortune, on the other hand, will be supported by the state. Who is the wise one?

This situation will only get worse. In simple statistical terms, the number of people aged 85 or over is predicted to rise from 1.3 million today to 3.3 million in 2033.

And to underline how this issue is beginning to look like a crisis in the making, it is estimated that, by 2021, 1 million of this elderly cohort will have dementia, and 1.7 million in 2051. With full-time residential care costing more than £30,000 a year at current values, this is one of the most expensive conditions to care for. In 2008, the King’s Fund estimated that the public cost of care homes will more than triple to £50 billion a year over the next 30 years.

How can that be funded? Various solutions have been proposed, including a tax on estates after death (derided as a “death tax”), specifically raised to cover the rising cost of caring for an aging population: figures of 10% or £20,000 were posited. Another idea was a voluntary lump-sum insurance scheme paid on retirement (£8,000) to cover future costs.

Old and irresponsible

The Commission on Funding of Care and Support has pledged to consider all the options. But the room for manoeuvre is limited. Raising funds at the end of people’s lives, or after death, to cover the shortfall,  smacks of desperate, retrospective measures. The fact is that provision for the cost of an ageing population is woefully inadequate, and the government will have to pick up a large proportion of the bill.

This is not just a problem for the older generation: it is an intergenerational issue of first magnitude. The younger generation will justifiably complain that their taxes are being mined to deal with a problem that was predictable but brushed under the carpet by their elders, who somehow expect the state to provide.

And they still do. Few British pensioners take seriously the kind of burden they are likely to impose on younger generations. Once retired, many think, for example, that it is their right to realise their travel dreams, to fly to Easter Island or cruise the world.

But, it can be argued, this is irresponsible if they haven’t first made reasonable provision to cover their long-term care costs that they may eventually incur. Unfair? Who is being unfair?