This NI increase for Social/Health Care

[mrmistoffelees]

Originally Posted by papa smurf

I think we just witnessed bojo losing the next election.

I highly doubt it, it will be all forgotten. Also, there is unfortunately being no viable alternative to Boris and his chums.

Originally Posted by papa smurf

I think we just witnessed bojo losing the next election.

Doing at NI will help him since it exempts the over 65s.

Originally Posted by Sephiroth

It does provide the Guvmin with the opportunity to reduce income tax and move the difference to the hypothecated (I hope) levy.

It won’t be hypothecated. That just doesn’t happen in our system; it would require some extremely convoluted legislation to achieve it, mostly due to the fact that the actual amount collected from any given tax can be quite variable from month to month and year to year, making definition difficult and, perversely, presenting risks to service delivery. The Treasury would squeal loudly about the extra red tape demanded by compliance and would warn loudly about the risks of hypothecating funds away that could only be released for other uses by Act of Parliament, even in an existential crisis.

The only effective guarantee of a tax being spent as promised in our system is parliamentary scrutiny and political debate.

[mrmistoffelees]

Originally Posted by Damien

Doing at NI will help him since it exempts the over 65s.

The over 65's who are still working are not exempt......

Originally Posted by papa smurf

I think we just witnessed bojo losing the next election.

Highly unlikely. The next election is well over 3 years away and the actual monthly difference on an average payslip isn’t enormous. Plus, when the election comes round, provided Boris has made some progress on service delivery, what exactly would Labour’s attack line be? Even now in the Commons Starmer is forced to take the ‘too little too late’ line because he knows it is untenable for a Labour leader to argue against modest tax hikes to pay for welfare services.

Nobody likes paying more than they have to but this just isn’t an electoral game changer.

Originally Posted by mrmistoffelees

The over 65's who are still working are not exempt......

Sorry, over 66. You don't pay NI when you reach state pension age.

---------- Post added at 13:36 ---------- Previous post was at 13:16 ----------

Sorry, read the detail more. It seems it will apply to people of state pension age. Not sure if that's the standalone levy that comes later or NI generally? Pretty big change if NI is now applying to those of state pension age.

[jfman]

Originally Posted by papa smurf

I think we just witnessed bojo losing the next election.

The party that delivered Brexit will be forgiven for many broken promises. It’d hard to see this is the straw that breaks the camel’s back - a tax that disproportionately affects poorer working age people as opposed to those who receive their income through dividends and the retired.

Originally Posted by jfman

The party that delivered Brexit will be forgiven for many broken promises. It’d hard to see this is the straw that breaks the camel’s back - a tax that disproportionately affects poorer working age people as opposed to those who receive their income through dividends and the retired.

This presumably is why they have also announced a tax increase on dividend income.

[OLD BOY]

Originally Posted by papa smurf

I think we just witnessed bojo losing the next election.

I doubt that, papa. Boris is the first PM who has promised to do something about the system and he did it.

He promised not to put up specified taxes at the election, it's true, but that's before the pandemic struck. The money has to come from somewhere.

The higher earners will be paying more towards social care through the dividend tax, so that should help take the sting away from those complaining that it's generationally unfair.

That it's a new tax after 2023 is interesting. As with NI it won't be ringfenced. It also means this alone can be raised whilst leaving the other two alone. I think people are more likely to support raising 'The Healthcare Levy' than NI.

[mrmistoffelees]

Originally Posted by OLD BOY

I doubt that, papa. Boris is the first PM who has promised to do something about the system and he did it.

He promised not to put up specified taxes at the election, it's true, but that's before the pandemic struck. The money has to come from somewhere.

The higher earners will be paying more towards social care through the dividend tax, so that should help take the sting away from those complaining that it's generationally unfair.

You’re forgetting that more people with assets will contribute less for their care than they currently do.

I’m unsure as to how that’s fair ?

[nomadking]

So if I have £86,000 and need to go into care, I can choose somewhere that costs that each month? Then what? As there is to be a £86,000 lifetime cap, I wouldn't have to pay anything else for the same level of service. There will still have to a cap on funding, as there is now.

Unless in addition to the value of their house(ie not home, consult a dictionary), people have a surplus of £86,000 in assets, they will have to sell it anyway, which is what people are whinging about.
What's going to happen in 20 years time when the costs will have more than doubled?

[mrmistoffelees]

Originally Posted by nomadking

So if I have £86,000 and need to go into care, I can choose somewhere that costs that each month? Then what? As there is to be a £86,000 lifetime cap, I wouldn't have to pay anything else for the same level of service. There will still have to a cap on funding, as there is now.

Unless in addition to the value of their house(ie not home, consult a dictionary), people have a surplus of £86,000 in assets, they will have to sell it anyway, which is what people are whinging about.
What's going to happen in 20 years time when the costs will have more than doubled?

I understand it as between 23.5k and 100k you will be means tested for the government's contribution but you can pay no more than 86k in total

So, there's an increase in state funding from the current levels IF you have savings/assets above the 23.5k limit. Whilst those earning over 9k ish per year will pay more. Ultimately those with assets will pay less for their care.

---------- Post added at 14:20 ---------- Previous post was at 14:17 ----------

I don't know why they didn't keep the existing level of 23.5k and then limit the NI increase to 1%

Good summary from the Beeb - one thing that is quite important is that this is about care costs, not accommodation (so if people are in Private Care Homes, not sure how this benefits them).

https://www.bbc.co.uk/news/uk-politics-58473787

My personal view (and we are actually doing this at the moment for my mum-in-law) is that if the person is in a residential care home, and has assets to pay for this (and with no partner in the family home), the home should be sold to pay for the Residential Care Home fees.

The challenge will be in 5 years time when the money runs out...

I suspect the small print will have something to say about the maximum monthly cost the government will pay on behalf of those who have paid out their personal maximum contribution. That will result in some awkward conversations with nursing homes about their monthly fees. A few of them, especially those whose rates are close to the state maximum, may reduce their fees to keep residents. Others will be forced to watch their residents get relocated to other, cheaper homes.