Over 40s should pay extra tax to fund social care, says LGA

31 Jul 18

Over 40s should pay an annual tax premium to plug the social care sector’s funding gap, council leaders have argued.

A social care premium for over-40s and working pensioners is one of four key proposals in the Local Government Association’s social care green paper, published today.

Other suggestions included increasing income tax for taxpayers of all ages, increasing national insurance, means testing universal benefit and allowing councils to increase council tax.

The LGA committed to publishing its own green paper following the government’s decision to delay its green paper until the autumn.

Initially, the government’s green paper was planned for the summer but was delayed to come out later in the year at the same time as the NHS’ 10-year plan for spending its £20.5bn funding boost, announced last month.

The LGA, which represent 370 councils in England and Wales, estimated that adult social care services face a £3.5bn funding gap by 2025, just to maintain existing standards of care.

This gap shortfall could be eased by charging over-40s and working pensioners an earmarked contribution, which could be added onto National Insurance, for example.

The LGA said that if it was assumed that everyone over 40 was able to pay the same amount, a fee of £33.40 a year could raise £1bn by 2024-25.

The umbrella-group calculated that a one pence rise in income tax could raise £4.4bn by 2024-25, while the same rise but in National Insurance payments would produce £10.4bn over the same period.

Means testing universal benefits like winter fuel allowance and free TV licenses could raise £1.9bn by 2024-25 according to the LGA, and allowing councils to increase council tax by 1% could generate £285m.

Izzi Seccombe, chair of the LGA’s community wellbeing board, said a long-term funding solution for adult social care has been “kicked into the long grass” by successive governments and has brought services to “breaking point”.

She added: “Building a better society means ensuring that everyone receives the care they need to lead a good life: well, independent and at home for as long as possible. This process must start now.”

The consultation will run for eight weeks and the LGA will respond to the findings in a further publication in the autumn in order to influence the government’s own green paper.

Glen Garrod, president of the Association of Directors of Adult Social Services, said: “ADASS will work with the LGA alongside all stakeholders in this critical debate to ensure the voice of adult social care remains prominent throughout.

“This document maintains a much needed profile in the lead up to the government’s formal green paper due now in the autumn.”

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