Care homes sector ‘likely to support equity release scheme’
ONE of the leading figures in the island’s care homes sector has said her industry would be likely to support an equity release scheme to pay for long-term care if it returns to the States.
Politicians are likely to discuss the issue again this year, just three years after the previous States rejected a package including an element of equity release. The Committee for Employment & Social Security has said it is one of its priorities for this year.
Cathy Bailey, chairwoman of the Guernsey Care Managers Association, described that 2020 vote as ‘a lost opportunity’ with long-term care funding likely to run out as demand increases.
‘The vast majority of people if they’ve been resident in Guernsey for five years or more can access the long term care benefit scheme,’ she said.
‘It’s an excellent scheme, but it’s across the board. It’s not means-tested. And we felt that the answer to help fill some of the financial black hole would be to look at equity release, which the States decided not to pursue, and which we think is a lost opportunity.’
There are currently almost 2,000 local residents over the age of 85, and that number is predicted to double by 2045. Some predictions say it will triple by 2085. At the same time the overall island population may well fall.
‘Now that is a seriously scary statistic when you consider that there will be fewer people of working age to look after them,’ said Mrs Bailey.
‘Most people in Guernsey, if they’re a homeowner, might be asset-rich but cash-poor. So even if they were talking about £35-40,000 to come out to cover their care costs, there’s still a real pot of money there for them to leave to dependents and offspring, without having to sell the family home.
‘I think there’s a misconception that if it was equity release that you’d suddenly have to sell a home. The average house in Guernsey is about £640,000.
‘So if you’re taking £40,000 on the death of that person, they don’t have to sell the asset. If you’ve got several siblings, you can decide to pay the £40,000 to the States and you’ve still got the asset, or decide to sell the asset and split it up, but it’s still saving the taxpayer that amount of money. And for us it seems a no-brainer.’
Employment & Social Security president Deputy Peter Roffey said the issue needed to be explored ‘in the context of our ageing population and budgetary challenges’.
‘I know this won’t be popular, but it would be irresponsible to expand the scope of the long-term care scheme to incorporate care provided at home without a clear funding plan.’
