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Winners and Losers: Assessing the Distributional Effects of Long-Term Care Funding Regimes

Published online by Cambridge University Press:  07 June 2007

Ruth Hancock ,
Ariadna Juarez-Garcia ,
Adelina Comas-Herrera ,
Derek King ,
Juliette Malley ,
Linda Pickard  and
Raphael Wittenberg
Ruth Hancock
Affiliation:
Department of Health and Human Sciences, University of Essex E-mail rhancock@essex.ac.uk
Ariadna Juarez-Garcia
Affiliation:
Health Services Management Centre, University of Birmingham
Adelina Comas-Herrera
Affiliation:
Personal Social Services Research Unit, LSE Health and Social Care, London School of Economics
Derek King
Affiliation:
Personal Social Services Research Unit, LSE Health and Social Care, London School of Economics
Juliette Malley
Affiliation:
Personal Social Services Research Unit, LSE Health and Social Care, London School of Economics
Linda Pickard
Affiliation:
Personal Social Services Research Unit, LSE Health and Social Care, London School of Economics
Raphael Wittenberg
Affiliation:
Personal Social Services Research Unit, LSE Health and Social Care, London School of Economics
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Abstract

Using two linked simulation models, we examine the public expenditure costs and distributional effects of potential reforms to long-term care funding in the UK. Changes to the means tests for user contributions to care costs are compared with options for the abolition of these means tests (‘free’ personal care). The latter generally cost more than the former and benefit higher income groups more than those on lower incomes (measuring income in relation to the age-specific income distribution). Reforms to the means tests target benefits towards those on lower incomes. However, the highest income group are net losers if free personal care is financed by a higher tax rate on higher incomes and the effect on the whole population considered.

Type
Themed Section on the Costs of Long-Term Care for Older People
Information
Social Policy and Society , Volume 6 , Issue 3 , July 2007 , pp. 379 - 395
Copyright
© Cambridge University Press 2007

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