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A thinktank says country’s rich pensioners should lose some of their benefits to fund social cares system to some extent (29 May 2012)

Date: 29/05/2012
Duncan Lewis, Legal News Solicitors, A thinktank says country’s rich pensioners should lose some of their benefits to fund social cares system to some extent

In its report an influential thinktank has analysed that better off pensioners should lose some of their benefits such as winter allowances and free bus passes, and face higher rates of tax to raise cash for the country’s social care system.
Nuffield Trust argued that to cope with an ageing population and to limit elderly people's exposure to catastrophic costs, social care budgets were needed to double to more than £25bn in a decade.
To meet the extra costs, the report says ministers should consider cutting universal benefit payments to older people with higher incomes and wealth. The result would be richer pensioners forgoing winter fuel payments, free TV licences and free bus passes, saving £1.4bn a year.
Arguing that pensioners' average income has grown by 47% over the past 11 years, about three times their earnings, and that almost three-quarters of over-65s now were owning their home, the trust says that "the government needed to explore options to put some burden of any tax increases on to wealthier older people.
The Nuffield Trust said it is time to consider "a 5% tax on all estates above £25,000 [that] would yield around £3bn a year" – hard for a government reeling from claims that its budget smuggled in a "granny tax" that penalised pensioners.
Anita Charlesworth, the trust's chief economist and former director of public spending at the Treasury, told the Guardian that such a "flat inheritance tax" should be considered. The social care system was creaking and expected to grow worse and right time to take some substantial decisions where a fair debate could be started with older people about the different ways the state can tax and support them.
Charities welcomed the report, saying it was needed in "opening up an honest debate about how the government and individuals need to plan for a new sustainable system of paying for social care.
Michelle Mitchell, charity director of Age UK, said that as the government was preparing to publish the white paper on social care and a progress funding report, it was vital for the three main political parties and government departments to reach agreement on the scope and scale of required funding reform.
The Nuffield Trust says the state spends £140bn on "services and support" for older people but "just 6% of this was spent on social care" – this at a time when local authorities have systematically been reducing access to care, leaving a third of elderly people to manage on their own.

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