Call for 'age-tax' on over-40s to defuse care 'timebomb'
This funding pot would exclusively go towards elderly care needs amid growing evidence that many family carers are at breaking point
An "age tax" should be imposed on the earnings of workers over 40 as well as employers, to tackle the timebomb of caring for older people, a new report warns.
The money generated would have to be ringfenced for a 'New Deal' scheme for the elderly - providing not just nursing home support, but also home care.
The radical proposals are revealed in a new discussion report from Sage Advocacy, which was set up five years ago to promote, protect and defend the rights and dignity of vulnerable adults, older people and patients.
It calls for an additional earmarked social care insurance contribution to be introduced. It would be paid by middle-aged workers and employers, which could be an addition to PRSI or a replacement for the USC.
In the short to medium term, revenue from inheritance tax could be allocated to the age fund in order to build it up to the level require d, it said.
"Funding derived from such premiums must be ring-fenced for long-term care to ensure the accountability desired by the public," the report added.
This funding pot would exclusively go towards elderly care needs amid growing evidence that many family carers are at breaking point.
The Government currently operates the €1bn means-tested Fair Deal scheme to subsidise 23,000 nursing home residents, and is promising to set up a separate statutory home care scheme by 2021.
Around 50,000 people are getting some form of non-means tested home care from the HSE, but for many it is as little as half an hour, and over 6,000 are on a waiting list for the service.
However Mervyn Taylor, executive director of Sage Advocacy, said that this separation of home care and residential care was short-sighted and fundamentally flawed.
"We need a continuum of support and care to be funded with a bias towards home which is where the vast majority of older people want to live for as long as possible - we need a 'New Deal'."
Patricia Rickard-Clarke, former Law Reform Commissioner and chair of Sage Advocacy, said: "Putting in place a sustainable long-term care financing system requires detailed consideration by Government and substantial consideration by the public.
"This issue is not going to go away. Put simply, the question is how and where is Ireland to find the money to pay for long-term support and care in an ageing society."
The report said in Ireland we are pushing the funding of long-term care for older people down the road. There is three times more spent on residential nursing home care than on home care.
The report points out there has been no serious discussion on what lengths as a society we are prepared to go to in order to pay for the long-term needs of the old population.
For every one person over 65 in Ireland currently, there are five people of working age. But by 2050 this ratio will be closer to two people of working age for each person over 65.
In 2015 one in eight of the population was over 65 but this will increase to one in six by 2030.
Outlining the advantages of working people and employers paying into the old age fund through social insurance, the report said:
- It is reasonable to assume that people would pay over their lifetime if they could be guaranteed good quality long-term care services should they need them;
- Such a fund would allow for a more protected, community-based funding model than the one currently in existence;
- It would share the cost and be in line with the principles of social and inter-generational solidarity;
- People already pay into insurance-based systems for various contingencies. Paying into a long-term care social insurance fund may be attractive if potential benefits are clearly identifiable;
- Total reliance on taxation to cover the costs of long-term care can be a huge problem, as available funding is subject to the vagaries of the market and related exchequer funds.