Social care plans are plans designed to look after the old aged people in their later lives by providing them with some basic facilities and money. It is like a pension scheme for the old people after their retirement.
What makes social care plan different from a pension scheme is that pension is usually given when a service or employment is done by the employer, but in a social care plan, it is funded by the government on payment of a small amount of premium paid during the middle age.
The UK social care plan
Critics in UK started to blame this system as a Tax on Getting Old. According to them, people of the 50s need to pay an extra amount considerably high to this national insurance and also have to pay tax on the winter fuel allowance. Also people are discriminated on the basis of amount they pay. The higher one pays the better facilities he/she receives.
Thus the UK government laid down a “green paper” which presents its own set up social care plan for the public to analyse and give their views. The former work and pensions secretary named Damian Green proposed this paper to the government. He was earlier sacked as a Deputy Prime Minister for a case of lying. Everyone knew that the reason why he was a part of this green paper is because of he being formerly the pensions and work secretary and his friendship with the prime minister Theresa May.
According to Green’s proposal, anyone at his 50s should pay one percent extra for this scheme in national insurance along with being liable to tax for winter fuel allowance. This would make the annual premium around £308. Also, people would be benefited with extra care and support if they pay more during retirement. The extra money can be given out of the retiring person’s own savings or wealth but that’s absolutely on the will of the person. No one would be forced to sell their house for this scheme.
What are the alternatives?
It always involves a personnel to foot the bill of the increasing cost of social care plans. Though Green presented his proposals, there are some other alternatives too to help out in a social care plan. Some of them are:
- To fix a lifetime social care charge.
- To apply for a more generous means-test.
- To have a good insurance and contribution model.
- To keep aside savings earned from inheritance tax.
- To relieve pension pots withdrawal free from taxes.
The government vs the rest
Political controversies and doubts regarding the funding source for social care has put the common public and other administrators in deep suspicion. For this they even termed the whole of this system as a “dementia tax” and the voters stood firmly against it.
Again, to look carefully into the matter, there actually is something confidential in this matter. This is because the ‘green paper’ as mentioned above has not been materialized or passed by government yet. Maybe because any internal discussion on this matter is not possible at the moment when all the MP’s and other administrators are currently busy with Brexit.