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Will proposed elderly care plan penalise savers?

In July 2012, the Care Minister Norman Lamb made the bold declaration that elderly people would not have to sell their homes to fund care in old age. Critics are now concerned that the Government has backtracked on that promise, with the latest proposals including a means test which risks penalising many middle-class people who have saved for their golden years.

Controversy has arisen over the revelation that anyone with savings of more than £23,250 will be exempted from the newelderly care scheme, which will cap individual liability for elderly care costs at £72,000.

The scheme is based on the recommendations in the Dilnot report, which also suggested a universal deferred payment scheme to reduce the number of older people forced to sell their homes to pay for elderly care. Those eligible for the scheme would have their elderly care costs covered by their local council, and the money would be recovered from their estate after death.

The Labour peer Lord Lipsey, said ministers had “welched” on the Dilnot report’s recommendations, telling peers: “The original scheme put forward by Dilnot has had its balls cut off by the government in the consultation document … If you have more than that, you have to spend down until you have £23,250 left in the bank or wherever it is, and then you can consider a deferred payment scheme.

“However, most people who have reasonably valuable houses, who are the people most likely to want to adopt this measure, will have far more than £23,250 worth of other assets.”

Mr. Lamb has not confirmed whether the Government intends to press ahead with the £23,250 threshold to access the scheme, saying that “no decisions have been taken” about introducing a cash and shares cap.