IFS care cost proposals

The Institute of Fiscal Studies (IFS) has suggested that wealthier pensioners should make a bigger contribution towards the cost of long-term care for the elderly.

This is because they have benefited more than any other age group as a result of lower taxes, higher incomes during their working lives and various state benefits.

Presenting the argument in their Pensioners and the tax and benefit system paper, the IFS claims that the government can afford to introduce the care reforms proposed by Andrew Dilnot by means testing various benefits currently enjoyed by all wealthy pensioners.

If this approach was adopted, it could see the introduction of means testing on items including exemptions from National Insurance contributions, winter fuel allowances and free television licences.

Whilst the Dilnot proposals are estimated to cost the government around £2bn to implement, this means testing approach could make them financially viable.

These look to be sensible suggestions, although we do not expect to see them implemented in the near future.

Successive governments have been incredibly slow to address the issue of care costs, instead preferring to delay the introduction of reforms and allow the status quo to continue.

With the population continuing to age, the ever rising cost of long-term care is going to need to be addressed on an individual basis, funded from individual resources, for the foreseeable future.

Photo credit: Flickr/Andy Magee