Young workers face losing out over long-term care insurance

Employment & Social Security fears that support for the island’s long-term care insurance scheme could be undermined by ‘inter-generational unfairness’ if workers currently paying contributions into the fund see that it will be exhausted by the time they need care themselves.

‘Unless action is taken, there is a risk the long-term care insurance fund will be exhausted before some of today’s working population need long-term care, despite having paid into the scheme throughout their working lives,’ the committee said.

‘At the same time, there are many recipients of care benefit currently who have not paid any contributions into the fund.’

Eligibility to claim on the scheme is not determined by contribution record, and the committee said the situation risked ‘a level of inter-generational unfairness’.

‘Younger workers today could be contributing towards benefits supporting their grandparents and parents with no surety that the same level of benefit will be available to them when they need it.’

ESS has proposed a new charge of up to £10,000 on anyone entering long-term care from 2027 and increases of thousands of pounds a year in fees charged for places in residential and nursing homes, as well as tighter conditions on who qualifies for benefits paid from the insurance scheme.

A debate is expected within the next few weeks.

The committee is also warning that users of long-term care may face further cost increases in the future, having ruled out putting up social insurance contribution rates again to fund a projected explosion in demand for residential and nursing beds as the population ages.

Contribution rates for long-term care increased last week and have gone up from 1.4% to between 2.2% and 2.5% over the past 20 years.

But ESS believes that further increases would add to the risk of inter-generational unfairness.

It said that the introduction of the £10,000 charge would ‘go some way to mitigate the risk but is only a short-term measure’. Other options will be considered next year.

Without further changes, the long-term care insurance fund is projected to last until between 2058 and 2067.

After presenting his committee’s proposals to other deputies, ESS president Peter Roffey said he was ‘relatively encouraged’. He understood they would be supported by most P&R members and the Health & Social Care Committee.

‘But if you’re asking me what the chances are of getting this through, I really don’t know,’ said Deputy Roffey.

‘Whatever solution we come up with to this conundrum is going to be relatively unpopular, because we’re going to need an awful lot more social care and we need to pay for that.

‘The whole community could pay, but we feel we’ve pushed constantly increasing contribution rates as far as we can go.

'So we’re asking more from the recipients of long-term care who can afford it.’