The Dementia Tax explained

“Unfair” and “disgraceful” is what the Opposition has said about the Conservatives’ care system proposal.

The Liberal Democrats referred to the controversial plan during the campaign with the words: “#DementiaTax. Don’t bet your house on it”.

The Tories received a great amount of criticism because of their manifesto and especially because of their elderly care system. It might even become one of the defining issues for voters.

When the manifesto was released, it stated that the Conservative Party would put a cap on the amount of total assets a person owns, which determines whether a pensioner has to pay for their care in full or not. After being pressured by the criticism, May made the last minute decision to take a U-Turn on the issue.

What is the ‘Dementia Tax’?
The tax is part of a broader plan to change the care system with different measures concerning people who are living in residential homes and people who are receiving care at home.

At the moment, people who require elderly care and want to be admitted to residential homes must pay for their care, if they have assets. This includes their property, if it is worth more than £23,250. If a person has less than £14,250 in total savings, they do not have to pay for their care.

The Conservative’s new scheme raised the cap of full payment to £100,000. However, when someone can’t finance the care and don’t want to sell their home, they can defer payment. When they die, the state will deduct the debt from their property.

The scheme does not clarify whether an interest rate will be applied if the payment is delayed until death. Nor does it clarify how people will be protected from overpriced bills from private home care providers, who can exploit clients when their home is included in their assets.

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Liberal Democrat Leader Tim Farron was among the many to call the scheme a “Dementia Tax”, because someone with dementia who is in need of residential or home care could find that they have state charges of between £200,000 to £300,000 after four or five years of care.

The £100,000 cap was dropped after the extensive criticism. May said that the specific number of the cap would be decided after the General Election.

Jeremy Hunt, Health Secretary, commented on Radio BBC4: “We couldn’t be clearer: not only are we dropping it the cap, but we are dropping it ahead of a General Election and we’re being completely explicit in our manifesto that we’re dropping it.”

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