Health committee chair slams plans for new ‘care Isa’
The chair of the Commons Health Committee has slammed Government plans to introduce a new “care Isa” saying it will only benefit a “small minority of wealthy people”.
Tory MP Sarah Wollaston branded the idea, currently being considered by ministers, a “colossal mistake”.
The proposal would give people the opportunity to save for their own social care and would be exempt from inheritance tax.
The plan is part a raft of new ideas being considered by the Government for inclusion in the forthcoming social care green paper, aimed at tackling Britain’s care crisis.
The Isa would be capped to reflect care costs and any unspent funds would be passed on to family members when the investor died without being taxed.
But responding to the proposal on Twitter, Ms Wollaston wrote: "This won't solve the care crisis at all. There is no pooling of risk.
"It only 'solves' it for a small minority of wealthy people who can afford to invest and whose families benefit from paying lower tax on their inheritance if not used for care."
She added: “Abandoning the centre ground & the will to tackle inequality is a colossal mistake.”
However, Conservative peer and former pensions minister Baroness Altmann, defended the plan.
She said: "If you haven't spent your Isas before you pass away, the money will go into your estate and could be taxed at potentially 40 per cent, so if you have large sums in Isas, there is the perverse incentive to spend them before you die."
A Department of Health and Social Care spokesman said: "Our green paper due in the autumn will set out our plans to reform the social care system to ensure it's sustainable for the future.
"In developing the green paper we are looking at how we can support people with the costs of their care in a way that is fair to all generations."