Tuesday, October 03, 2006


Who pays for Grandpa?

It’s always easy to talk about issues from a position of detachment. A lot of politicians get criticised for “not being in touch,” or “not living in the real world.” I admit, it’s not always easy relating to issues that I have no actual connection to, or thinking about problems when I have very few of my own. But I am encountering an issue for the first time at the moment that is making me see things differently.

I went to visit my Grandpa in his new abode yesterday, and again today. He has been moved out of ward E6 at North Manchester General Hospital, and into Parklands Nursing Home in Broughton. He has a fairly nice room with a TV (which he never watches) and a bathroom (which he can’t use because he is bed bound), and a view out over the gardens.

It’s not his house though. And it costs him £500 per week for him to stay there and be looked after.

I have always had a problem thinking about who should pay for elderly care. And now I have a personal connection to it for the first time. And it’s made me see the various sides of the argument.

My Grandpa isn’t a rich man, but he owns his own house and a few bits and bobs of other stuff. He’s also paid his taxes his whole life. That tax money paid for services at the time he paid it. He wasn’t paying into a pot marked “Grandpa” for him to raid when he was old. And he benefited from it at the time anyway – his children went to school, his roads were built and maintained, and if he ever set his head on fire, the fire brigade would put it out free of charge.

So do we owe him now, out of our tax pounds? Should we pay the cost of keeping him cared for at £500 a week? After all, he’s got an asset that would pay for his care for the next five years sitting empty a few miles down the road (his house).

What would he want? Well, first off, I doubt he’d want us to be having the argument at all! I imagine he’d want to have died long ago, before he sank into himself and lost the ability to live without constant care. Either that or, like me, wish to live in a state of intellectual and physical perfection until the age of 200. But either way, he’d want what he worked for to be passed on to his nearest and dearest, so that they can enjoy a more comfortable life themselves. He’d want the government to pay the costs, and to leave his assets alone.

But is this fair? Why should the government pay? After all, public finances are always stretched. Like it or not (and believe me, I don’t), my Grandpa is dying. The £500 makes him feel more comfortable sure, but it won’t make him better. The £500 might make a premature baby better, or a cancer patient. Or it would buy a school 50 books.

I have heard the arguments for putting up taxes to cover the costs of caring for the elderly – costs that have risen immensely and will continue to do so because medicine now allows people to stop dying for decades, even if their quality of life and mental health deteriorates markedly before they finally die. I support these arguments. I’d pay more, and I’d like people who can afford to pay much more pay much more. After all, these are our grandparents, and they deserve to be cared for. It will allow those who have saved and lived moderately prosperous lives to pass down their assets to their children untouched. The current system, whereby the middle-ranking majority are reduced to the level of those who’ve never saved a penny, strikes me as highly inequitable.

But lots of people don’t want to pay more taxes, which is fair enough. So could Inheritance Tax be the answer?

If people who die pay tax on their estates, why not allow this tax money to be used to fund the dying person’s care before he/she dies? Estates are calculated prior to death now anyway in order to work out how much of a care bill is to be paid. So why not perform the same calculation, levy the appropriate charge as if for Inheritance Tax, and make this the total sum that the person has to pay for their care. The rest will be funded by the state, and the remainder of the old person’s estate will pass down to the next generation. It wouldn’t all be paid at once – there’d be contributions like now. But there’d be a defined total maximum contribution which would be the same amount as the total Inheritance Tax liability should the old person die.

There may well be some obvious practical or financial reason why the idea won’t work. Or it might just be rubbish. Please tell me if I’ve missed something. But it seems sensible to me. Yes, family homes might have to be sold, but the problem would be no worse than at present, because the estate would be liable for Inheritance Tax anyway. It would just bring the whole thing forward a bit.

It would also allow for some certainty and finality. At the moment there is the horrible scenario whereby we say things like “Well, if he lives for three years then 20% of the value of the house will have gone. But if he lives for 15 years, then it will all have gone.” If the total liability is calculated at the start, it doesn’t matter quite so much, because there’d be a maximum figure from day one. If the old person lives on, the state will shoulder the burden. If the old person dies earlier, then the rest of the liability is paid as Inheritance Tax anyway.

And of course, the less well-off wouldn’t pay a penny, because they’d be exempt from Inheritance Tax.

My Grandpa clings onto life with a grin on his face. I don’t know if he knows what’s going on, but if he does then he’s a braver man than me to do anything but cry. He’s had speech problems and strokes for a few years. Where once he was wise and erudite, now he mumbles sounds and the occasional word. Maybe, just below the surface, he knows what he wants to say. But I don’t know.

And now he's got this thing whereby he absorbs no food at all. He weighs 5 stone 7 pounds. Painfully thin. This big head on a tiny frame that looks like it could crumple in the draught from a door opening. He hasn’t stood in four weeks and I don’t think he will again. Some days he can swallow. Other days not.

Whatever he’s thinking, it’d be a shame for him to know that his house was under threat to pay the bills. One way or another, it should be made fairer, easier and less cruel to our elderly and their families to ensure adequately funded and excellent quality care.

Interesting idea, it certainly merits research, and is a good use for inheritance tax (a tax which I am sceptical about - along with many others)
If it was earmarked for care for the elderly I think people would be more willing to pay it (even the very rich may...)

A lot of the problem is that National Insurance is not insurance, its a tax. It doesn't insure you against future need, but pays for other people's current needs, leaving us younger people (and our children) with ever bigger bills...
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