By Daniel Martin
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Lord Warner has suggested a new 'granny tax' that would see the elderly still having to pay national insurance
Wealthy pensioners could lose their winter fuel payments and free TV licences to help raise money for long-term elderly care, a government adviser said yesterday.
Lord Warner, who sat on last year’s inquiry into the funding of social care, added that ministers should consider a new ‘granny tax’ that would involve scrapping older people’s exemption from paying National Insurance.
The former Labour minister also suggested deducting money from people’s estates after death to pay for the long-term care they received in old age.
Lord Warner, who was a member of the Dilnot Commission, has been asked by Health Secretary Andrew Lansley to come up with a fair funding system for long-term care.
At present, tens of thousands end up having to sell their homes to pay care-home fees â€" denying their children an inheritance.
The Dilnot Commission suggested a cap of £35,000 on the amount that individuals can be charge d for care â€" but the Treasury is understood to have baulked at the plan’s £1.7billion cost.
Whitehall admitted yesterday that a long-promised White Paper on social care could be months away.
Lord Warner told the BBC’s Today programme that means-testing benefits that are currently universal, such as winter fuel payments, was one of several options for funding long-term care.
Means testing the winter fuel allowance is another possibility being considered by ministers
‘We were very clear in the Dilnot Commission that you had to expect the generation who are going to benefit from this to pay more towards the costs of their care,’ he said.
‘You could actually remove the exemption from paying National Insurance for people who work after retirement age. That’s one way of getting a bit of money.’
A similar ‘granny tax’ introduced in this year’s Budget, which changed pensioners’ tax allowances to remove a tax break introduced by Winston Churchill, was roundly condemned.
Director general of Saga Ros Altmann has called for less means testing
Lord Warner also suggested that the proposed cap on care fees for individuals could be raised to £50,000, guaranteeing care providers more money up front and reducing running costs.
‘We also proposed in the [Dilnot] report [that] you should look at collecting the money after death,’ he added.
‘You could actually let people build up a cost which they would pay in effect like student loans â€" they would pay interest on it and you collect it from the estate. You could put a levy on inheritance tax.
‘There are other ways of doing this if everybody is so concerned about avoiding universalism on winter fuel allowance, bus passes and so on.’
Ros Altmann, director general of Saga, said: ‘If you start means-testing pensions and benefits, all you will do is put people off saving. We need less means-testing, not more. There is a solution â€" the Dilnot report â€" but the Government does not have the courage to deal with it.’
A spokesman for Downing Street refused to say whether a White Paper on adult social care would be published before MPs break next month for their summer recess, saying only that it would arrive ‘within the coming months’.
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Means testing after retirement is discrimination against the very people who have paid in to the system.
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Stop tax free payments when Mps lose their seats. If Mps want a pension they should pay in to it, it should not be tax free. Anyone with a pension of over £40,000 should not get the heating allowance, bus pass or tv licence. Why should care homes be free in parts of the Uk we are supposed be UNITED! We should come out of the EU, 5% saving on our gas and electric immediately! No winer fuel payments to anyone living overseas.
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Well well well a former liebour minister proposing the introduction of a granny tax. Liebour will never stop until they spend all your money and that of future generations. Come to think of it the tories arnt that much better, they just seem to be a rebranded "new" liebour
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What is needed is the same rules for ALL pensioners right across the board. At present those pensioners in the House of Lords receive £300 per day TAX-FREE in addition to their personal pensions. If National Insurance is to be levied on pensioners who carry on working after 60, then surely those in the House of Lords should also pay National Insurance and Tax on their daily allowance?
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I would have thought that goes without saying. Obviously well-off pensioners do not need help.
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The system encourages the Debt Ridden Society why save if you get it all not nothing?
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Landru, Virginia, USA, 20/6/2012 21:39br Wonderful post stuffed full with common sense, so well said! The truth hurts, so expect loadsa "reds"!
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This is happening all over, we are out of cash, lets bash the pensioners. Says alot really. If people worked and quit living off the state, when they do not need to and had babies they could afford, we all could still pay pensions.
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They should scrap the Winter Fuel Payment, free TV licences, bus passes and everything else and pay a decent State Pension like they manage to do in the rest of Europe. - The truth is out there...., Somewhere, 20/6/2012 12:25 .............................. ...................................................................................................................................................... No, keep the Winter Fuel Payment, introduce Free TV Licences for all those aged 50 or above, introduce free bus and train passes again for those aged 50 or above and pay a decent State Pension. Anyone aged 50 or over must not be charged any VAT on gas and electricity bills. Introducing these measures will greatly greatly benefit the economy and may even improve the social fabric of society.
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'Means test DLA, the wealthy should not get that. Stop the health tourism and start charging non British people for care and GP visits. Give child benefit for first two children only. Do not stop the winter fuel allowance as I need it for a nice winter coat and Christmas presents........ - Pensioner, Here,Southampton, 20/6/2012 21:14' My my, are YOU going to be in trouble from the thought police when they find out who you are! Stop spouting the truth. You know that the truth is not allowed when talking about doing things properly in this country.
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