Boris Johnson does the unthinkable and raises taxes to pay for aged care

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UK Prime Minister Boris Johnson has not only broken an election but defied his own party to announce a raise in taxes to pay for caring for the elderly.

Mr Johnson said his Conservative Government had made the “difficult but responsible” decision to hike taxes by 1.25% in order to raise £36 billion pounds ($67.3 billion) over three years for the National Health Service and social care. £5.4 billion ($10.09 billion) will be given to the NHS to reduce backlogs and waiting lists created by the coronavirus pandemic, which has killed 133,674 people in the UK.

The Royal Commission into Aged Care Quality and Safety recommended a levy to help fund aged care on a sustainable basis in Australia, but the Government didn’t take up the recommendation in its response to its Final Report.

The burden of funding care for older, sick and disabled adults in the UK currently falls largely on individuals, who often have to deplete their savings or sell their homes to pay for it.

One in seven people ends up paying more than $100,000 pounds ($187,000), according to the Government, which calls the cost of elder care “catastrophic and often unpredictable.”

“No Conservative Government wants to raise taxes,” he said after an uproar among many of his backbenchers and reports of a cabinet rift over the plan.

At the weekend, Leader of the House of Commons Jacob Rees-Mogg recalled George H.W. Bush’s declaration in 1988: “Read my lips: no new taxes.” Mr Bush broke his pledge and lost the US presidential election four years later.

National insurance is paid by all UK workers except the low-paid. The Government said the 1.25% levy would also be slapped on share dividends to capture the better-off who rely on investments for income.

At present, anyone with assets over £23,250 has to pay in full should they need to go into a care home. That has led to many elderly Britons being forced to sell their homes and liquidate their life savings.

Under the new plan, from October 2023 anyone with assets of £20,000 to £100,000 will contribute to their care but will also get means-tested support. No one will have to pay more than £86,000 over their lifetime.

Mr Johnson said the tax hike would remove an “anxiety affects millions of people up and down the country” that “a condition like dementia, nature’s bolt from the blue, could lead to the total liquidation of their assets, their lifetime savings, their home, the loss of everything that they might otherwise pass on to their children”.

“A universal system of free care for all would be needlessly expensive when those who can afford to contribute to their care should instead,” he said.

But Lord Hammond, Theresa May’s chancellor, pointed out the increase is “asking young working people, some of whom will never inherit the property, to subsidise older people who’ve accumulated wealth during their lifetime and have a property.”

“On any basis, that has got to be wrong.”