StockMarketWire.com - New proposals for reforming social care by extending means-testing have been criticised by the government's business champion for older workers.

Ros Altmann says the proposals from the King's Fund to try to provide free social care and fund this by more means-testing within the current health and care framework is like sticking a plaster on a wound that is getting worse underneath. Covering up the issue will not really solve it.

She said she welcomed the report which highlights yet again the flaws in the system of social care.

Altmann says it is absolutely clear that radical reform of the care system is necessary to address the need for dignified care as the numbers needing care are set to soar in coming years.

She adds: "The King's Fund report is right to raise the debate about how to fund social care fairly in future, but the proposed solutions could make the situation worse, rather than better, in the longer term. We need a fair partnership between the individual and the State.

"A proper review of how to integrate health and care spending is needed, to identify the priorities for public spending and how to fund this fairly. This would allow for an increase in early intervention and more at home care, which can reduce the numbers needing more costly NHS interventions as a result of avoidable falls.

"However, the King's Fund proposal to take away pensioner benefits and limit them only to Pension Credit claimants is not a solution. Indeed it could increase the taxpayer costs of care as it is like cutting the state pensions of those who have saved and penalising those who try to be self-reliant. Increasing the age of eligibility is an issue to consider, and integrating the free benefits into the state pension would also make sense, so that they become taxable, but extending means-testing is dangerous. Trying to provide free social care and funding this by more means-testing within the current health and care framework is like sticking a plaster on a wound that is getting worse underneath. Covering up the issue will not really solve it.

"It is really important to help people save for later life care needs - there are absolutely no incentives in place for this at the moment and no specific products either. By extending means testing, those who save for care are simply going to be penalised further which will result in fewer people saving and more needing taxpayer support. Nobody is saving to cover care needs and no new products are available - by offering tax incentives such as more ISA allowances, or inheritance tax breaks, savings for care could be kick-started."

Altmann says she has been calling for the Government to introduce a new Care Savings Allowance for the over 50s to allow tax free savings towards care for themselves or their relatives. A 'Care ISA' allowance, or tax-free pension withdrawals to pay for care.

"Even if care funding is radically reformed, individuals will still have to fund a portion of their care costs themselves so it is vital that we help families put money aside just in case."


Story provided by StockMarketWire.com