People working beyond the state pension age could be required to pay a new ‘care tax’.
The tax, currently being considered by the government, is intended to alleviate the funding shortfall in the care sector, issuing a levy of 12%.
The proposals will be included in the care and support green paper, set to be published in June.
Also putting forward a plan to support the growth of demand in the healthcare sector was the Intergenerational Commission. In a report published today, the organisation set out its recommendations to introduce an ‘NHS levy’ to help reduce the strain on the National Health Service as it struggles to cope with the needs of an ageing population. This would be via National Insurance on the earnings of those above State Pension age, as well as limited National Insurance on occupational pension income.
The Commission also aims to address the unmet social care need, proposing a public funding increase of more than £2 billion for social care ‘from a replacement to council tax, alongside an increase in property-based private contributions towards care costs.’ It also stated that these charges should be limited by a strict asset floor and cost cap, meaning that no one would be asked to contribute in excess of 25% of their wealth for their own care.
Whilst the report highlights the vitality of the funding for the future of the NHS and social care system, it stresses that tax changes are never easy to implement and should not be made lightly.
The report can be accessed here.
