Local authorities will lend people the money to pay for nursing home care, which costs tens of thousands of pounds a year. However, people's homes will not need to be sold until after they have died, according to chairities and insurers.
The loan would be a mortgage secured against the value of a person's home. The loans would either be interest-free or interest would accumulate at the same rate as inflation.
Councils would reclaim the cost of the care loan from the person's estate. It would never be more than the total cost of the home.
At the moment, anyone with assets of more than£16,000, including the value of their home, has to pay the full costs of a nursing home, which often means quickly selling their property.
This forces more than 35,000 people a year to sell their homes. The long-awaited government proposals will come almost 18 months after a Royal commission report into long-term care.
It recommended that the state should pay all nursing and 'personal' care costs, while wealthier individuals should pay for their accomodation. However, the government has not adopted the commission's proposals because of the costs they would incur.
It is proposing to meet only nursing costs. Charities also believe that the definition of 'nursing' will be restrictive so fewer people will qualify for state help.