FORUM: We must axe this tax on dementia

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PAULA Ryan’s tragic story perfectly illustrates the urgent need to change our social care system.

She was widowed 50 years ago and struggled to bring up her four children as a single parent, teaching them the right values. She never asked for help from the state, even though the family were poor.

At the age of 63 she was struck down by the terrible disease of Alzheimer’s. It became difficult to manage at home and she moved into a care home. She was expected to survive between four and seven years.

Most people still think a woman in these circumstances would be cared for by the state. But this has never been the case. Currently, if you have housing, savings or income of more than £23,250 then you will be charged the full costs of your care.  

Fortunately, Paula Ryan defied predictions and has just celebrated her 80th birthday. But, unfortunately, this meant her children used up all her savings, and then had to sell her house. Her family have spent more than £300,000 on her care.

Last Christmas, Paula’s daughter Mary was desperately trying to persuade her local authority to take over responsibility for the bills, as the family simply had no money left. After months of anxiety, the state finally stepped in.

The Ryans are not alone. One in four of us will pay £50,000 for our care and one in 10 of us will pay £100,000 and more. It is those with some savings and modest homes who are losing out the most in the current system.

As things stand there is a tax on dementia. It is effectively 100 per cent of all assets over £23,250 and it is expected that one in four of those reading this article will develop dementia. Addressing this kind of injustice is one of the aims of economist Andrew Dilnot, whose report into the funding of long-term care was published this week.

He wants to put in place a national system which has a clear maximum amount of money we will need to pay towards the costs of our care so we can plan ahead.

Only those with savings of more than £100,000 will have to pay the full cost, with the value of your home only counting towards that sum if neither you nor your partner is living in it. 

On the other hand those of us lucky enough to have means will have the amount we are expected to pay for care capped so we have to pay a maximum amount of between £35,000 and £50,000. This could be covered by using a lump sum pension payment to pay for insurance or by the local authority putting a charge on your house. 

There are many who have called for care to be funded entirely by the state and I understand why they make that case. But in considering the solutions put forward by Dilnot, now is a time not to let the perfect system be the enemy of real change that could make a difference to millions. 

We must use the Dilnot Report as a stepping stone to achieve urgent reform.

When Labour was in office we made several unsuccessful attempts to find a solution. Our last attempt to set up a National Care Service began as a cross-party effort until the political opportunism of the Conservatives got in the way. They pulled out of talks and electioneered on the threat of a “death tax”.

Despite this, we believe this remains an issue that is above party politics and is too big for one party to fix on their own. I am going to cross-party talks in the next few weeks, but this issue has to be resolved at the highest level and include the Treasury. For that reason, Ed Miliband has, in good faith, called on David Cameron to show leadership and meet him. 

• Emily Thornberry is Labour MP for Islington South and Finsbury and Shadow Health and Care Minister 

Published: 8 July, 2011
by EMILY THORNBERRY