People over the age of 50 could be forced to pay more than £300 more in national insurance each year in to fund social care, under plans that have been branded a tax on getting old by Labour.
Senior Tory MP Damian Green has proposed a major shake-up to funding for care, arguing that it should follow the state pension model where everyone is entitled to basic support but individuals top up the pot through their own savings.
The former cabinet minister, who was given the task of drawing up the long-awaited green paper on social care for England when he was in government, suggested a 1 per cent rise in national insurance for the over 50s as a last resort to fill the £2.75bn funding gap in the system.
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In a paper for the Centre for Policy Studies, he said £350m could be generated by taxing the winter fuel allowance and even scrapping it for the highest earners.
Social care has proved to be a political stumbling block for Theresa May, after her 2017 election campaign was effectively derailed by a manifesto commitment to ask people to pay more for their social care – dubbed a dementia tax by critics.
Mr Green’s suggestion of a 1 per cent levy on national insurance would raise £2.4bn, which amounts to an extra £308 a year for people aged between 50 and 64.
“Taxing the winter fuel payment and taking it away from those who are higher rate taxpayers, allied to either a national insurance top-up or wider government savings, would inject £2.75bn into the system targeted only at residential and nursing care,” Mr Green’s report said.
On top of the £6bn already provided by the government, this would cover the cost of the universal care entitlement under Mr Green’s model.
This could be boosted by a privately-funded care supplement, a new form of insurance which could pay for rooms, better food, more trips and additional entertainment in care homes.
Mr Green, a long-time ally of the prime minister, said: “The crisis in our social care system is one of the most pressing issues our country currently faces.
“It causes acute problems for the wider NHS, with 1.98 million delayed transfers in 2017/18 for those moving out of NHS care.
“The Conservative party has an urgent need to show that it has ideas about vital domestic policy issues such as this.”
His intervention will be seen as an attempt to shift the focus from Brexit, ahead of this week’s local elections, where the Tories face a drubbing from angry grassroots members.
Labour seized on the proposal, which it described as an attempt to punish older people with a tax on ageing.
Shadow chancellor John McDonnell said: “After nearly a decade of brutal cuts to social care, the Tories now want to make older people pay through increased taxes.
“We want to hear today a clear statement from the government that they will reject this call, protect the triple lock, and follow Labour’s call to fund social care properly.
“Anything less than a clear rejection of these plans to punish older people, and the voters will need to draw their own conclusions.”