Government unveils pay after death care plan

Pensioners moving into residential care will be given state loans so they do not have to sell their property immediately, under new plans.

People will be able to borrow money from councils at nominal interest rates, with the sum being paid back after their death.

The scheme, being introduced across England in April 2015, is intended to help around 40,000 people each year who are forced to sell their homes to cover care costs. Some local authorities already operate similar arrangements, but provision varies widely across the country.

The announcement is part of a raft of proposals being published by Health Secretary Andrew Lansley. It emerged over the weekend that cross-party talks on reform of social care for the elderly had broken down after ministers made clear funding decisions would not be taken until next year's spending review.

Labour has insisted the coalition's pledges are "meaningless" without concrete plans for meeting the estimated £1.7 billion cost. But Mr Lansley is to press ahead with the release of a white paper and draft bill on social care, as well as a report detailing progress towards solutions on key issues.

Ministers want to cap the amount anyone pays towards care during their lifetime at £35,000.

Mr Lansley said: "It is hard enough for people to come to terms with needing to pay for extra help when their circumstances change - whether their health has suddenly deteriorated or age has started to take its toll. The last thing people want to think about is having to immediately sell their home to pay for residential care.

"That is why, from April 2015, we will ensure that people will be able to delay selling their home to pay for residential care. This will give people greater flexibility and peace of mind at what can be a very traumatic time."

The "universal deferred payment" scheme for care homes was first proposed by a Royal Commission more than a decade ago. Since then, councils have been able to offer interest-free loans to people who face having to sell their home to pay for care. But the new scheme will order councils to provide the loans.

The social care proposals are also expected to include initiatives to help carers and give people far more control over their own care. The Government is keen for more pensioners to be looked after in their own homes, rather than go into nursing homes.

10 of the biggest consumer rip-offs

10 of the biggest consumer rip-offs

More stories