One of the major issues that developed during the recent UK election was the topic of social care and the part of the Conservative party’s manifesto that became known as the “dementia tax”.
Now, a council will pay for the full cost of a person’s social care if they have capital below £23,250. A council will only consider a someone’s home towards this threshold if they are in residential care. A local authority will not consider the value of the person’s property if they receive care in their own home.
People who receive residential care or are in nursing homes with capital more than this limit can defer payment. They can choose to have this cost settled by their estate after their death.
Dementia Tax Proposals
The conservatives proposed increasing the capital threshold to £100,000. They also proposed that property value would be considered even if someone was receiving care at home. The option to defer payments until after someone’s death was also extended to those receiving car at home.
The initial reaction to the proposal was negative and many groups pointed out that this was a step in the wrong direction. The Prime Minister then announced that there would be a cap on the amount that any person would pay towards social care. No details were given of what this cap would be though a figure of £72,000 was mentioned.
All groups, organisations and charities associated with all forms of dementia highlight the fact that it is a disease. Though unlike other diseases it is not treated through the NHS and is on a completely separate footing. This can leave families with huge bills that they would not have if their loved ones were suffering from another terminal disease. Therefore, this proposed legislation was a step in the wrong direction.
So, why does society treat dementia differently to other diseases? Firstly, it is different to many terminal diseases in the respect that it is much slower to come to the end. As it progresses the care that an individual needs increases as do the expenses to provide it. Finally, it is common, there are many people suffering from dementia and the number is on the rise.
Have you thought about it?
This got me thinking about expat social care and the options available to them. Do expats consider it when they make plans for their futures? I think that the answer to this is not very much if at all. Who wants to think about such morbid horrible things and anyway it probably won’t happen to us. To a certain extent, this is undestandable though we all know people who have felt the impact of dementia. So surely we should be giving expat social care some consideration.
The Logistics of Dementia
Many countries around the world offer tax incentives for foreigners to come and retire in their country. This can have a big influence over our decision on where to move along with property prices, cost of living and the quality of healthcare. Maybe we should also be thinking about the expat social care options available as well.
I have a British friend in Malaysia who is married to a local lady. Sadly, both of his in-laws started to suffer from dementia at the same time. In the past, this wasn’t such a big issue for Malaysia though increases in life expectancy mean it is getting more common. The care options available to them beyond living with a family member were very slim. Malaysia has excellent medical facilities through care homes are almost none existent. The same applies to trained staff who know how to care for people with dementia.
This situation is not unique to Malaysia, many other popular retirement destinations have embryonic care sectors. The simple reason being up until now dementia has been very much a first world disease. This is starting to change and dementia rates are starting to increase across the globe.
So if you’re moving somewhere that you don’t have extended family and doesn’t have extensive care options. Then you could be in a difficult situation down the line.
The Cost of Dementia
Very often we don’t even plan for retirement properly let alone factoring in the cost of social care. If we have planned for our retirement then would it be enough to cover the ongoing cost of paying for expat social care. On average the cost of care for someone with dementia in the UK is £32,250 per annum. In the UK you can defer this expense for your estate to settle. It is unlikely that this option is available to you if you are living overseas. The likelihood is that you will pay costs as they arise from savings or income.
If there are two of you what would be the impact on the other partner, would there be sufficient money for them to live? What happens when the money runs out, where do you go? Places like Malaysia, Thailand, Costa Rica or Belize won’t provide for you through their welfare state. Do you head back home and if you do what are the financial consequences to that?
In addition to this if you have been living away from home for quite some time, do you have the same access to services that you once had? Changing demographics are stretching most western countries finances thinner and thinner. They are looking to make savings wherever possible, hence the dementia tax.
Whilst no one likes to think that it will happen to them, it doesn’t alter the fact that it could. Some of you may think that by that time you just won’t know any better so why bother. You should bother because the stress that it can put on your partner is enough without having to worry about finances as well as care.
Expat social care should form part of our conversations about our future. It should be one of the things that we consider when we are deciding where we are going to retire. Finally, and by no means least it should further emphasise the importance of adequate retirement planning.