Johnson's Social Care statement

[Newchodge]

Would you prefer a social care package that is drawn up in a few minutes?

Johnson declared publicly in 2019 that he already has a full package drawn up.

 

[Mr D]

That is true, but it is on a very low base. Why isn't all income taxed equally?

Because none of the political parties want to touch that hot potato.
Would hit the poorest hardest.

 

[Mr D]

Johnson declared publicly in 2019 that he already has a full package drawn up.

And you may have noticed some other quite important issues have occupied parliament in the past 2 years.

 

[Mr D]

I think the first problem is expecting people who earn below the income tax threshold, and many of whom struggle to survive, to find an increased contribution to the government to alleviate the problem faced by those who are much better off than they are.

And yet some of those who you don't want to pay will be having care home bills paid for by other people....?

 

[Mr D]

Raising NI makes it even harder if you want to work but are stuck on benefits. Working gets less financially appealing with less in the wage packet.

The freeze on the income tax threshold until 2026 also squeezes the bottom end earners too. Not much incentive to work there either.

When I was a lad, wages were used as incentives to work.
As an adult wages are still used as an incentive to work.

Personally have never considered tax rate as a disincentive. Yes I know we get punished for working - millions of us accept that.
To some of us the money is what we agree to prostitute our time for.

 

[Mr D]

It's all sorts of systems that need dragging into the 21st century, eg why are the NHS still sending letters through the post? Except for a few edge cases it's totally unnecessary.

The NHS is sometimes not sending letters through the post.
My wife gets one letter a month from a particular clinic - several other clinics send texts or emails.
Probably a couple of years since I last had a letter from the hospital. I'm in there for appointments several times a year.

 

[Mr D]

In England you contribute on a sliding scale from around £14k to £23k, we are better off in Wales where you don’t contribute if you have under £50k BUT the amount paid by local authorities does not cover the care home charges so people and their families are required to pay a top up fee.
Don’t run away with the idea that the proposed cap will cover all care home fees, it will only cover the nursing fees which is about £200 per week (so about 7.6 years worth) NOT the “hotel” costs which are anything from £700 per week.
Considering that most care home stays average 2.5 years very few people will reach this cap. this is a rehash of the Dillnot report of 2010.

There will always be some.

And like many government ideas, the outriders of a problem are whom the solution is written for.
Not just this government either. Multiple past governments have done the same.

 

[thetiger2015]

Personally have never considered tax rate as a disincentive. Yes I know we get punished for working - millions of us accept that.
To some of us the money is what we agree to prostitute our time for.

...but when the money you're given at the end of the month is taxed to oblivion, any pleasure derived from working those long hours (fun money) is completely dissolved.

Essentially, you are a slave. You are paid the bare minimum, any profit is taxed away, you're left with the money you need for essentials only. Mortgage/rent/basic food supplies.

I know of people in the care system, privatised care, that are now working in excess of 90 hours per week to cover staff shortages. There's a mix of Brexit and Covid at play, neither of these issues are being helped by the government. This move won't increase employment in poor pay jobs, it will just drive people out of those jobs, because they can't physically do it any more and any small glimmer of happiness is taxed away from them.

There's also a very high turnover of staff in the care industry, because it's so much hard work, unsociable hours, low pay, what's the point? Where is the benefit? Where is the incentive? You're better off working 2 part time jobs in a petrol station, with less responsibility and fixed hours.

 

[Mr D]

...but when the money you're given at the end of the month is taxed to oblivion, any pleasure derived from working those long hours (fun money) is completely dissolved.

Essentially, you are a slave. You are paid the bare minimum, any profit is taxed away, you're left with the money you need for essentials only. Mortgage/rent/basic food supplies.

I know of people in the care system, privatised care, that are now working in excess of 90 hours per week to cover staff shortages. There's a mix of Brexit and Covid at play, neither of these issues are being helped by the government. This move won't increase employment in poor pay jobs, it will just drive people out of those jobs, because they can't physically do it any more and any small glimmer of happiness is taxed away from them.

There's also a very high turnover of staff in the care industry, because it's so much hard work, unsociable hours, low pay, what's the point? Where is the benefit? Where is the incentive? You're better off working 2 part time jobs in a petrol station, with less responsibility and fixed hours.

Never earnt such a high wage that the money was taxed into oblivion. When you did it was it that bad?
Most I've ever paid in tax is just over £2k in a month. And I was taking home more than I paid in tax that month.

I've been paid the minimum for a number of years. Never been a slave - that is a term I'd use only for people who are slaves. We have some in Britain, nothing like working for minimum wage!
Money needed to pay essentials only? Gosh, that sounds like life....
Been there, done that. Doesn't prevent someone being happy.

Working in excess of 90 hours a week to cover staff shortages - legal? The working time limit not applying?
Yes, there are staff shortages. There were 25 years ago when I was a care worker - back when pay was £2 an hour take home pay. Staff working double shift, 8 to 11. That's a 15 hour day.
Being a part timer I just worked 4pm to 11pm, having already worked 7am to 3pm elsewhere.

The problems of care workers have been around for a long time. Won't be solved any time soon - increased pay simply means more money into their bank account, nothing more. Still a crap job with good or bad management, good or bad travel needed etc.

 

[japancool]

Here's a solution. Ship the old dears off to Cambodia or Vietnam where private care costs are lower. They'll only be there for a couple of years anyway.

 

[gpietersz]

Because none of the political parties want to touch that hot potato.
Would hit the poorest hardest.

How could it hit the poorest hardest? They do not have investment income and the change would be to abolish employee NI and raise income tax, and the rise in income tax would be less than employee NI rate. People with earned income would pay less, and those with unearned income would pay moref.

 

[japancool]

Tax capital and wealth.
https://www.bbc.co.uk/news/business-58485824

 

[Mr D]

Tax capital and wealth.
https://www.bbc.co.uk/news/business-58485824

Thing about wealth is - how to get the cash?
Little old lady living in a £1.5 million house by herself. Tax it - but how to get the tax money from it?

Or say someone with a load of money invested in shares, bonds etc - they will have cash eventually, they have currently just wage income. How to get the tax....

Usually campaigners talk about taxing the rich, about getting money from the wealthy etc - yet when it comes down to it they tend to vastly overestimate how much tax can be gained.

Remember the swiss bank account debacle a few years back? Turned out most of the people had already declared the money or else it wasn't taxable. Generated a lot less than campaigners insisted would be raised.

Thing about income taxes are they are easy to get. Don't have to wait till people die.

 

[Mr D]

How could it hit the poorest hardest? They do not have investment income and the change would be to abolish employee NI and raise income tax, and the rise in income tax would be less than employee NI rate. People with earned income would pay less, and those with unearned income would pay moref.

Eh?
Tax all income equally was what I was replying to - why would employee NI be abolished? Its a tax. We call it national insurance and treat it as a tax on income.

Drop income tax allowance and NI lower limit to zero, all income taxed equally...
People would pay more tax - which is the intent of the increased government income the current tax change is set up for.

 

[Jeff FV]

Thing about income taxes are they are easy to get. Don't have to wait till people die.

Correct, so why not rise income tax instead of National Insurance?

I do think (and am happy to pay, although I’ll admit I’d probably grumble when my take home pay goes down!) we should be paying more tax to fund NHS & social care.

But we should do this by increasing income tax - which has a wider net and is therefore fairer - than National Insurance which is only paid on income from wages.

So someone who goes out and does 40 hours a week min wage job will pay more under this new scheme, whilst someone who’s income comes from renting out property, or share dividends won’t pay any more. Is that fair? I don’t think so.

 

[Alyson Dyer]

Correct, so why not rise income tax instead of National Insurance?

I do think (and am happy to pay, although I’ll admit I’d probably grumble when my take home pay goes down!) we should be paying more tax to fund NHS & social care.

But we should do this by increasing income tax - which has a wider net and is therefore fairer - than National Insurance which is only paid on income from wages.

So someone who goes out and does 40 hours a week min wage job will pay more under this new scheme, whilst someone who’s income comes from renting out property, or share dividends won’t pay any more. Is that fair? I don’t think so.

Because both employee and employer pay NI so the government gets two bites of the cherry

 

[DavidWH]

Well something needs to change.

I've seen relatives forced to sell their homes to pay for care costs. I'm fairly sure they were paying the care home much more than what the home were charging the local authority for the same care. In effect the wealthy subsidising the poor.

But thats the system, and it seems to work.

However, look at the numbers of peoples renting properties, unable to purchase a property.

I know a few people who rent, and have no intention of buying, what happens to them when they come to retirement? Who pays the rent? Same when it comes to care costs, where does the money come from to fund it?

 

[Alyson Dyer]

Well something needs to change.

I've seen relatives forced to sell their homes to pay for care costs. I'm fairly sure they were paying the care home much more than what the home were charging the local authority for the same care. In effect the wealthy subsidising the poor.

But thats the system, and it seems to work.

However, look at the numbers of peoples renting properties, unable to purchase a property.

I know a few people who rent, and have no intention of buying, what happens to them when they come to retirement? Who pays the rent? Same when it comes to care costs, where does the money come from to fund it?

it’s not what the home charges the local authority, it’s what the LA is prepared to pay the home. Family then has to top up the difference.

 

[DavidWH]

it’s not what the home charges the local authority, it’s what the LA is prepared to pay the home. Family then has to top up the difference.

They'll still face the same problem though if those getting older have less assets (home owners) and less savings.

Who and how are they going to fund it? They need to plan now, not wait until its already happening.

 

[Mr D]

Correct, so why not rise income tax instead of National Insurance?

I do think (and am happy to pay, although I’ll admit I’d probably grumble when my take home pay goes down!) we should be paying more tax to fund NHS & social care.

But we should do this by increasing income tax - which has a wider net and is therefore fairer - than National Insurance which is only paid on income from wages.

So someone who goes out and does 40 hours a week min wage job will pay more under this new scheme, whilst someone who’s income comes from renting out property, or share dividends won’t pay any more. Is that fair? I don’t think so.

National insurance is another income tax.
Sure, could put income tax itself up by say 2% to get the same effect. Which has a lower number increase? Income tax or NI?
Can agree with you about paying more tax - if it makes a difference.

Income tax having a wider net and therefore fairer? Not so sure on that. Can reduce tax paid, can avoid tax even. Is avoiding NI so easy? And how are you defining 'fairer'? Its one of those slippery concepts that people usually use to mean 'lower'.

Someone renting out or getting money from shares is assured of a lot less certainty in their income. So long as the wage earner doesn't lose their job they likely will carry on earning for years to come.

Someone working 40 hour week NMW is already paying income tax and NI. If was so concerned for them then remove the requirement to pay those taxes at all. Just be prepared to pay a LOT more in taxes yourself to allow it.

 

[Mr D]

it’s not what the home charges the local authority, it’s what the LA is prepared to pay the home. Family then has to top up the difference.

And if the family don't have the money to pay the difference? What then?

 

[DavidWH]

And if the family don't have the money to pay the difference? What then?

Isn't that why those who do have the money end up paying top dollar for the same care, in the same home, with the same staff?

It's not a dig at care homes, they've got wages and bills to pay.

 

[Newchodge]

Isn't that why those who do have the money end up paying top dollar for the same care, in the same home, with the same staff?

It's not a dig at care homes, they've got wages and bills to pay.

And profits to make, which is where they differ, in part, from the NHS.

 

[Mr D]

Isn't that why those who do have the money end up paying top dollar for the same care, in the same home, with the same staff?

It's not a dig at care homes, they've got wages and bills to pay.

Indeed.
Same service, same meals, same staff, same cleaning.

A problem without any easy solutions. Best we can hope for is politicians fiddling around the edges of the system or minor changes here and there.

 

[Mr D]

And profits to make, which is where they differ, in part, from the NHS.

Yes, the NHS is so good at providing services that the public will pay money extra to have non - NHS services too.

Some of those for profit services are helping the NHS considerably by doing the work for them.

You got a hospice near you? Run by the NHS or run by a different group who provide superior service to the NHS?

 

[IanSuth]

I would equalise Income tax, CGT & small company corporation tax and scrap NI (employee and employer)

That should remove some of the incentives to use different vehicles to earn £ through in an effort to minimise tax as basically little or no differential. Would make accountants sad but save loads of resources lost in the cat and mouse game of tax avoidance

I would set a care costs cap (covering medical and hotel cost) and also set a national rate that was charged at with it up to individual homes/providers to negotiate with public bodies etc - link the standard weekly charge to the cap (as in cap is x weeks) so it keep pace with inflation.

I would then state anyone hitting the cap, when they die there is a 10% charge on the their property. (I believe this has been costed at enough to cover the care industry costs)

Yes it is a "death tax" but it is the fairest way, there are large sums tied up in property which have only arisen in the last 30 years and it is unfair that those lucky enough to be born to parents lucky enough to live in the right place in 1990 should get to keep all that unearned gain at the expense of others less fortunate

I write this as someone who had zero in 1990 (my mum had just left my stepdad as was living in a hostel and i was repainting a university SU main hall for food a hardship funds) - i was dead lucky my now wife had £20k from family so after i got a job in 1993 we were soon after able to buy a 2 bed terrace for £50k with only a £30k mortgage (which was about £150 a month if i remember rightly), paid it off by 1999 when the house was worth £90k and bought the current house for £170k so only an extra £80k which is now worth £450k - in 28yrs £320k of gained equity is a lot of unearned £ and paying £45k of that from the estate would be fair in my mind - fairer than raising NI which has the min wage earning care workers seeing a drop in takehome which will mean they want a payrise (or rise in min wage) which will then just eat up some of the tax raised. I understand my graduate son who just got a job at £28 will be facing a 50% marginal tax rate next April when you add in his 9% student loan repayments (a graduate tax in all but name)

 

[DavidWH]

And profits to make, which is where they differ, in part, from the NHS.

I don't begrudge them making a profit. If it was so profitable and easy why is there such a shortage of care available?

As previously stated, there are plenty of 'profit' making companies, supplementing the NHS services, my old man had his cataract treat by a private hospital, funded by the NHS.

 

[UKSBD]

And if the family don't have the money to pay the difference? What then?

The family member is moved to a cheaper care home that provides a more basic service, or moved to a different area of the same care home and provided with more basic services.

Not much different to hotels which have different grades of rooms

 

[gpietersz]

Tax all income equally was what I was replying to - why would employee NI be abolished? Its a tax. We call it national insurance and treat it as a tax on income.

Drop income tax allowance and NI lower limit to zero, all income taxed equally...
People would pay more tax - which is the intent of the increased government income the current tax change is set up for.

That would not tax all income equally. Unearned income would still be taxed at a low rate than earned income because only earned income is subject to NI.

 

[DavidWH]

The family member is moved to a cheaper care home that provides a more basic service, or moved to a different area of the same care home and provided more basic services.

Not much different to hotels which have different grades of rooms

Not always, the local authority may decide to keep them in their current home. Where my grandparents were, had a mix of both self funded, and Local Authority funded residents.

I would imagine homes have a ratio of authority funded, and privately funded, that makes it sustainable.

 

[Newchodge]

I don't begrudge them making a profit. If it was so profitable and easy why is there such a shortage of care available?

As previously stated, there are plenty of 'profit' making companies, supplementing the NHS services, my old man had his cataract treat by a private hospital, funded by the NHS.

In a previous role I used to negotiate with local authorities in the north east who were planning to sell off their care homes to private companies. They always insisted that the reason for doing so was that they could not afford to run the homes themselves. When I asked how they expected the private companies to afford to run them at a profit they went very quiet. Of course they did it, initially by cutting staffing costs as they were, virtually, the only costs that could be cut. leading to staff shortages and some of the problems we see now.

I don't begrudge private companies profits, however I believe there are some things that should not generate profits - ill health and disability needs being one area.

 

[UKSBD]

Not always, the local authority may decide to keep them in their current home. Where my grandparents were, had a mix of both self funded, and Local Authority funded residents.

I would imagine homes have a ratio of authority funded, and privately funded, that makes it sustainable.

That would depend on the quality of service or standards.

If the local authority are paying your grandparents may be in the back room overlooking the car park next to the bins, if someone is topping up, their room may be at the side looking out over the gardens, close to the communal rooms and warder.

 

[japancool]

You can't predicate a system on home ownership.

 

[IanSuth]

You can't predicate a system on home ownership.

Why ?

It is to a certain amount already, only those who had sufficient capital early enough in their life to afford home ownership have the ability to purchase a home - hence why allowing the unfettered transfer of capital down generations perpetuates divides (there is of course the outlying few who start with nothing and make loads quickly but they are a vanishingly small %)

 

[JEREMY HAWKE]

Stop belly aching and just pay the bill
We have to pay for this you know !

 

[Mr D]

The family member is moved to a cheaper care home that provides a more basic service, or moved to a different area of the same care home and provided with more basic services.

Not much different to hotels which have different grades of rooms

Different grades of rooms - but same staff providing same service, same meals, same medication, same bathing etc.

 

[Mr D]

You can't predicate a system on home ownership.

Apparently we have been doing.

 

[Mr D]

In a previous role I used to negotiate with local authorities in the north east who were planning to sell off their care homes to private companies. They always insisted that the reason for doing so was that they could not afford to run the homes themselves. When I asked how they expected the private companies to afford to run them at a profit they went very quiet. Of course they did it, initially by cutting staffing costs as they were, virtually, the only costs that could be cut. leading to staff shortages and some of the problems we see now.

I don't begrudge private companies profits, however I believe there are some things that should not generate profits - ill health and disability needs being one area.

As a disabled person I gladly use the for profits companies supplying services.
Over time innovation has occurred. Was looking at some wheelchairs a couple of years back - then saw a wheelchair conversion kit that was a lot cheaper and more suited to our needs.

Or getting bathroom conversion I want.

Had some stair rails fitted by the NHS requesting them a few years back, the dumb assessors had the bars going across the bathroom and bedroom doors (luckily the fitter had more sense than the assessors)- and poorly fitted onto the stairs such that one rail has come off completely. The rails fitted in the bathroom by a for profit business are solid and have had far heavier use.

Without ability to make a profit then you are restricting a service / goods.
Really bad idea - the state paying is one thing, the state being able to provide what is needed and in an efficient manner is another matter entirely.

 

[bodgitt&scarperLTD]

Stop belly aching and just pay the bill
We have to pay for this you know !

Why should the care home nurse pay more (on her already low wages) and yet her landlords income be unnafected? On top of that, her landlord can pass down more of their wealth to their family.

It's a direct tax on the younger, working people in order that the fortunate,who have done sweet FA to 'earn' that housing equity can be 'taxed' less when they pass it on to their children. That's what's wrong with it.

 

[japancool]

Why ?

Because you exclude a significant portion of the population who aren't homeowners.