Inheritance tax freeze to fund elderly care
The government is due to propose a freeze on inheritance tax thresholds in order to help fund care for the elderly, guardian.co.uk reports.
The reforms gave been made in order to "end the scandal" of older people being forced to sell their homes in order to pay for care.
It would mean that the pledge made by George Osborn to raise the inheritance tax threshold to £1 million will be delayed.
Health secretary, Jeremy Hunt implied on 'The Andrew Marr Show' yesterday (10 February) that the current threshold of £325,000 could remain in place until 2019.
He insisted that ministers are 'determined to protect people's inheritance'.
Mr Hunt 'all but confirmed' that a cap of £75,000 would be set - the amount that individuals would have to pay before the state contributes.
Eighty per cent of the money £1 billion required for this scheme would be derived from National Insurance increases, the remainder from inheritance tax.
Unsurprisingly, the announcement has provoked a mixed reaction. Campaigners believe that the cap is double what was outlined in the Dilnot report on funding social care and that pensioners would still struggle to meet care costs.
However, under these proposals, the state will also intervene if an individual's assets fall below £123,000, almost ten times the current threshold, dailymail.co.uk reports.
A government source commented: "The result of the social care reforms will be that 100,000 people who would have had to pay will be helped.
Those who have worked and saved all their life and bought a property won't have it taken away just because they did the right thing.
That's only fair. "We are going to protect their inheritance."