Pensioners are being targeted to be charged for National Insurance to help pay for social care.
Pensioners to Pay 8% National Insurance Contributions
Pensioners have been warned that they might have to pay 8% of the National Insurance to cover the increasing social care costs.
Revival of Johnson’s Health and Social Care Tax
The proposal revives Boris Johnson’s health and social care tax, which was introduced in September 2021.
1.25% to Accumulate £12 Billion
The original proposal aimed to add a 1.25% levy to National Insurance bills, accumulating £12 billion annually to address the NHS backlog caused by COVID-19 and long-term social care expenses.
All Due to Pay the Proposed Tax
The National Insurance levy was proposed to be paid by the self-employed, employers and workers, with pensioners having to pay it as well.
Pensioners Don’t Pay National Insurance Contributions
Currently, pensioners pay income and indirect taxes but don’t pay National Insurance contributions.
Standard Rate Applied to Pensioners
This would be a radical change for pensioners, who wouldn’t just pay the proposed National Insurance at 1.25%; they would be charged the standard rate of 8%.
Reeves Announced Cap on Long-Term Nursing Care
Chancellor Rachel Reeves announced that she would abandon the proposed cap on how much families pay for long-term nursing home care.
Cap on Social Care Expenses at £86,000
Prime Minister Boris Johnson proposed the initial idea of the cap, which would have been implemented in October 2025 and would limit families’ social care expenses to £86,000.
Cap to Protect Family Homes
The cap prevented families from selling their properties and assets to pay their care bills.
A Scrap of Cap Saves an Estimated £1 Billion
By scrapping this cap, Reeves will save an estimated £1 billion, adding fuel to the fire after she recently announced that she would scrap the winter fuel payment, which helps cover costs during the winter time.
Financial Uncertainty for Many Ahead
Many families will face uncertain financial times regarding their social care costs without the cap.
Sir Andrew Dilnot Speaks Up
Sir Andrew Dilnot, who authored the original care cap in 2011, labelled Reeve’s decision to scrap the planned changes to the care system as a “tragedy.”
“Failed Another Generation of Families”
Sir Andrew told the BBC’s Today Programme, “We’ve failed another generation of families.”
Designated Tax for Social Care Would Be Reasonable
He has argued that if there is a tax specifically designated to fund social care, it is reasonable for pensioners to contribute to this tax, like working-age individuals.
Young and Old to Contribute if Going to the Right Place
Sir Andrew suggested that pensioners who work should contribute to National Insurance. He said it was “not unreasonable to expect older people as well as younger people to make a contribution.”
Proposed Solution: Raise Income Tax
He proposed that the government could raise income tax by a penny as an alternative to pensioners paying National Insurance.
Sir Andrew” Shocked” With Reeves
Sir Andrew commented on Reeve’s announcement, saying he was “shocked and deeply disappointed” and emphasising that his plan would have “taken away the fear” surrounding social care costs.
No Plans for the Reintroduction of Cap
Reeves was asked whether the cap would be reintroduced later and stated that Health Secretary Wes Streeting would work with the sector to improve social care.
“I Am Angry Too”
While addressing MPs, Ms Reeves expressed her disappointment and acknowledged that she understands what people are angry about, adding, “I am angry too.”
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