Older low-income households with long-term care needs often find themselves in a funding gap: too asset-rich to get council support (because they have more than the threshold of £23,000 of equity in their homes) but too income-poor to adequately pay for the care services they need.
Regardless of the wider debates raging about how to fund social care in the long term, our view is that more can be done now to enable this group to fund appropriate care and wellbeing packages through releasing the equity in their houses.
Selling the home is the most obvious solution, but this option is neither popular nor appropriate for those with non-residential needs.
Equity release represents a more flexible option, but existing products largely fail to meet the needs of low earners.
As we argue in our report Funding Future Care Need: the role of councils in supporting individuals to access the capital in their homes, the state can fill the gap and much can be done within existing rules.
A lot has been made of the variable use of deferred payment powers across councils, and it is certainly true that schemes should be more actively and consistently promoted.
But their usefulness is limited by their restriction to individuals entering residential care. Our report shows how the most innovative councils have opened up a range of possibilities, by combining the freedom to help residents under the wellbeing power defined in section two of the Local Government Act 2000 with the ability to place charges on their properties under the Health and Social Services and Social Security Adjudications Act.
The councils we have spoken to are keen to find solutions for those residents caught in the long-term care funding gap, but find it difficult to know how far they can take existing powers.
While reform of the long-term care system is required, enabling older low earners to access their equity can improve choices now for people in the funding gap, and prevent many from going without the care they need.
Matthew Whittaker, senior economist, the Resolution Foundation