Elderly care cap encourages people to hide wealth says minister

Rules excluding virtually anyone with property from free personal care actively encourage people to hide their assets, the head of a Government commission on the crisis has warned.

Andrew Dilnot described the current threshold as “monumentally stupid”, leaving ordinary people with little option than to “cheat” the system.

He also warned the Coalition that he would become a public critic if an overhaul of the current “broken” system is not outlined before the summer.

Around 1.2 million frail or vulnerable people in England rely on care services provided by their local council. It is thought that almost one million more are in need but receive no help.

Last year Mr Dilnot, an Oxford economist, proposed a new system of social care, with a cap on what individuals would have to pay set at around £35,000.

He also proposed lifting the threshold to qualify for state-funded care.

At present anyone with total assets, including their home, over £23,250 does not qualify for any help with their social care costs. The Dilnot Commission proposed raising that threshold to £100,000.

A Government white paper is due be published in April, setting out new proposals to tackle the crisis.

Speaking at the Royal Society in London yesterday Mr Dilnot described the cut-off point as like falling over a “cliff edge” for elderly people in need of care.

“This is mind-numbingly stupid, it is unfair, it also leads to a massive incentive to cheat,” he said.

“We now live in a country where reputable firms of solicitors are encouraged to take out full page advertisements offering to help people to find a way to get around this.”

Several law firms openly advertise their services to help people avoid care home costs while still passing on their property to their children.

Legal methods include placing people’s property into trusts so that they can qualify for care without selling their home.

Mr Dilnot told the Westminster Health Forum that the current system was “completely broken” and urged politicians to work together to come up with a major overhaul in the white paper.

In a warning to the Coalition, he said: “All I care about is that by the summer we know what is going to happen and if we don’t I will be very, very disappointed and loudly so.

“If we find out by the summer that nothing much is going to happen that would be unacceptable.”

Neil Duncan-Jordan of the National Pensioner’s Convention said it was clear people would be looking at legal loopholes to avoid paying for care because of the cripplingly high costs.

But he said Mr Dilnot’s recommendation to raise the threshold to £100,000 would not solve the problem, given that his own report recognises that the average value of an elderly person’s home is about £160,000.

“He has missed at trick frankly by setting his threshold so low, if he was serious about stopping what he describes as unscrupulous practices he could have done that by raising the threshold higher and taking the temptation away,” he said.