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All over-40s could face higher taxes to fund cost of care – expected to soar by £7billion a year 

All over-40s could be asked to pay more tax to help fund the cost of their care in later life under radical plans being discussed by ministers.

Boris Johnson is examining a string of proposals for tackling Britain’s social care crisis, the cost of which is expected to soar by an extra £7billion a year.

The Prime Minister is under pressure to come forward with a solution to the issue he first pledged to ‘fix once and for all’ more than a year ago.

He wants to end the injustice in which thousands of older people are forced to sell their homes to cover the cost of their care because they are deemed too wealthy to qualify for council-funded care.

He has asked officials to devise a scheme that shares out the costs which fall on those who need expensive care, which can exceed £1,400 a week, with the wider population.

Under one proposal, everyone over 40 could be asked to pay an additional levy, either through tax, national insurance or a private scheme in which they were compelled to insure themselves against the cost of care.

Health Secretary Matt Hancock is promoting the idea, which is modelled on schemes in Japan and Germany, The Guardian reported last night.

In Japan, people start paying an additional tax for social care at the age of 40. In Germany people pay 1.5 per cent of their salary into a ring-fenced fund when they start work, with employers making matching contributions.

However, there are said to be ‘vast differences of opinion’ within government about the idea, with the Treasury thought to still be opposed.

The Department of Health last night declined to comment on whether Mr Hancock was championing it. But a source close to the minister denied the claims and said the Treasury would lead on decisions about how a new care system should be funded.

The move came as councils, charities and health organisations called for a ‘reset’ of the social care system.

In a joint intervention, the Local Government Association (LGA), which represents councils in England, together with more than 30 organisations including the Alzheimer’s Society and NHS Confederation, urged major changes. 

They said the Government needs to publish a timetable for a reformed social care system before Parliament returns from its summer recess in September.

LGA chairman James Jamieson said: ‘For too long we have been promised a plan to fix the social care crisis but people who use and work in these vital services are still waiting. The Covid-19 crisis has proved we need a complete reset, not a restart, when it comes to the future of social care.’

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