Councils should be playing a greater role in helping people tap into the equity locked away in their homes to pay for their care needs, according to a think tank.
The Resolution Foundation is calling for local authorities to combine their legal charging powers with their wellbeing powers to help asset-rich, but cash poor, residents pay for home adaptations or domiciliary care.
In the longer term the foundation, which focuses its work on people with low incomes, argues that councils should be providing residents with interest free loans to fund their care and support needs.
Acting director Sophia Parker said new report Funding Future Care Need showed how councils could help people with low incomes but assets worth more than the £23,000 maximum to qualify for free state care.
“Low earners are squeezed in the current care system - excluded from help because of modest assets, yet unable to afford care costs,” she said.
“The Resolution Foundation is not advocating that this is the solution to our funding crisis in long-term care but we do believe it is an interim solution to help many low earners who currently end up going without or relying on inadequate informal care.
“ In the longer-term the cliff-edge many low earners currently face must be ended in a reformed social care system.”
The report recognises that councils already offer interest free loans to residents to help them cover the cost of residential care without having to sell their homes immediately.
But it highlights inconsistent use of the Government’s preferred method of doing this – the Deferred Payment Agreement – in research underlined by LGC.
The foundation argues that councils should look to use legal charging powers under the Health and Social Services and Social Security Adjudications Act and wellbeing powers in the Local Government Act 2000 to provide help that can be claimed back from residents’ estates.
It accepts that in the longer-term new legislation allowing councils to offer interest-free loans for care may be beneficial.
The report, based on the findings of an expert group including the Local Government Association, charities, and several directors of adult social services, suggests that councils could pool resources to provide loans to residents across organisational boundaries, conceivably even selling those loans on to the capital markets to release funds.