NOW it makes sense! ‘Dementia tax’ is an INSURANCE SCAM

[Image: MTSOfan via photopin cc.]

It all makes sense if you think about social care as a commercial opportunity – and the Tories think all health care is a commercial opportunity.

The Dementia Tax, as it has been dubbed, is nothing more than an attempt to create a grubby little insurance market.

To explain, take a look at this:

For those who can’t read Facebook screen grabs very well, a commenter to This Site has typed it all out as follows:

“The Conservatives will attempt to soften the blow by promising that pensioners will not have to sell their homes to pay for their care costs while they or a surviving partner are alive. Instead, ‘products will be available’ allowing the elderly to pay by extracting equity from their homes, which will be recovered at a later date when they die or sell their residence.

“I have just seen this post online:

“‘People need to read the small print associated with this because its a lot nastier than it looks.

“I work in the City. The insurance industry was approached by the Government several months ago with the aim of creating a new market for a new product.

“This arrangement is a culmination of those discussions. You wont have to sell your house PROVIDED that you purchase an insurance product to cover your social care. The “premiums” would be recovered from the equity after the house has been sold and the Insurance company will have a lien on the house and can force a sale if it wants to. So your offspring cant keep it on the market for long in order to get the best price.

“The real kicker in this is that in order to encourage the industry to market these products the government guaranteed that there would be no cap on the premiums.

“This was in some ways “atonement” for Osborne’s destruction of the highly lucrative annuities market. This means that the premiums could be up to (and including) the entire remaining equity in the property after the government has taken its cut. Companies will be falling over themselves to get their snouts in this trough.

“In short your offspring and relatives could get absolutely nothing from your estate.

“If you buy one of these products you need to read the small print very very carefully indeed because there will be some real dogs on the market.

“I suspect that this is another financial scandal waiting to happen, but by the time it does May will be long gone.'”

I wonder if a company called Unum has had anything to do with this?

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13 thoughts on “NOW it makes sense! ‘Dementia tax’ is an INSURANCE SCAM

  1. Dez

    Yes…..nice little earner for the boys. The annuity market has had plenty of dogs in the past mainly to release the equity early in the house but of course had a very bad press because of the barrow boys running amok with the unwary. Trust the Cons to think of their bed fellows in their time of need….bankers were first in their corruption games closely followed by their chums in insurance scams I will not give them the dignity of calling it an insurance market. Buyer beware big time if the Cons are involved with anything. One or two Con donations from grateful insurers on the way..

  2. Mike Parr

    Working on the basis that lumps of the city will emigrate to mainland Europe the tories need to open up “new horizons” for its city supporters. Social care was privatised by tory/tory-lite and a half-hearted attempt at forcing some people to pay with assets for social care was also engaged in. This looks like a full-blooded attempt to privatise the totality of the cost of social care – which shifts another tax off gov books The “end point” in all this is “you only get what you pay for”. it is a continuation of the Osborne project of reducing state functions to, very roughly, law and legal violence (the army) – even tax collection capability was much reduced under osborne and doubtless this will continue under may-hem. RIP Ingerland.

  3. mozzas01

    It always was inevitable. Thatcher sold us to the Americans and the destruction of the welfare state, to be replaced by private insurance, has been planned since 1982.

  4. Peter

    The other commercial opportunity: the dementia tax is a stealth incentive to take out equity release mortgages. This fast-growing market is dominated by Legal and General in the UK (29pc market share), of which a major shareholder is Capital Group, of which a key UK executive us Philip May, husband of Theresa May. Very, very cosy.

    1. Mike Sivier Post author

      Very interesting. I’ve written an article; we’ll see what happens.

      1. Chris Rae

        Sounds like conspiracy theory to me. I stand to inherit a nice piece of property from my father and I am confused as to why people should be falling over themselves to pay for his care from their taxes so I get it it all?
        I’ve not done anything especially good to deserve this lump of money. How no one smokes we are all living longer and this area is going to need ever growing money to fund it and it seems reasonable to me that you use your own wealth to look after yourself first. inheritance has been the tool that kept the aristocracy in the driving seat for hundreds of years I don’t see it as a good thing. For the record he already has dementia, I look after him.
        Equity release products would be an issue.
        However I think you guessing at the mortgage thing to back you own ideology. But you you get your way then I’ll be minted.

      2. Mike Sivier Post author

        Good luck to you. You’ll also be paying for other people’s care, and that’s fine with me, too.

      3. Chris Rae

        I think that how the welfare state works, those that have pay and look after those that have not.

  5. jeffrey davies

    that’s crap we paid all our lives into that tax pot to allow government to take our houses away is total dail light robbery they bleed us dry even after death yes I’m a bloody dementia patient and this is a tax to far while they offer their mates big tax breaks oh dear jeff3

    1. Chris Rae

      Jef you obviously have a few years left before you get to my father position as he does not even know who I am, having said that, and apart form you don’t like tax, I’m unsure what you are saying.
      Just a point it is not a tax on dementia, as the circumstances apply on anyone who needs care which might just include old age. The Dementia label is being used by the sound bite politicians who have no courtesy for dementia sufferers. Its also not a tax, its a loan; you are paying for your own care and can make the choices yourself on where you get your care, something people reliant on the state do not get.
      I’m 58 and the basic income tax rate was 33% when I started work. If social care is to be dealt with on a everyone get everything free basis I would imagine tax will have to go up. I’d be less happy about that.

  6. disabledgrandad

    Chris if he gets dementia then you Hope to get some money depending on how long the person lives. The amount of money you may get left gets used up quick at care home prices of around 50,000 a year!

    Oh and a will is just scrap paper if the royal court of protection is involved. They decide on what happens to any assets left if any, not you!

    1. Chris Rae

      Dad does have dementia £50k is a made up figure to support a desperate argument and whilst there will be home somewhere that charges £50k or more, most of us don’t shop in Harrods and use care homes from the Tesco’s Sainsburys budget choices. A will deals with the estate left after all the priority charges. From memory The royal court of protection is only involved if a person is unable to make decisions for themselves or the person acting as attorney is in conflict with the authorities.
      However you are missing the point. My question is why should the general taxpayer be asked to pay for my father’s care where the sole outcome is that I inherit more money?
      Why am I not expected to do what my father did, go out and work hard and earn my own money?
      It seems to me that the proposal for people to pay for their own care if they can afford it is a sensible welfare state suggestion.
      I can think of no good argument why the general taxpayer, many of whom are worse of than us, should be asked to contribute anything towards my fathers care.

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