Majority opposed to selling homes to pay for care

ishmael whale

The high proportion of people opposed to releasing equity from old peoples homes to pay for their care is puzzling me. In the years ahead the proportion of old people in the population will increase. Many of them are sitting on valuable properties – also known as their homes. If for some strange reason we feel we should not expect them to contribute to the cost of their own care, it means someone else has to pay – basically, younger people. So, essentially, 60% of the population are saying that wealthy, debt free old people should have the cost of their care paid for by debt laden people including those with commitments in the form of children.

I can think of only two explanations for this. One is some misty eyed notion that the wealth in old folks homes is sacrosanct in some way, despite the inevitable consequence of such a belief being to push expense onto people only joining the property ladder. The other is a more nakedly self serving agenda, of people looking forward to inherit a house once mom pops her socks.

Before anyone clouds the issue with irrelevance, its not as if the idea involves automatically putting anyone out of their home – it might simply operate on the basis of their home reverting to the State on their death.

The Government response seems to be some waffle along the lines of people will have to contribute, but how they raise the money will be their own affair. That seems to be a bit of a fudge – and in practical terms will presumably lead to old people remortgaging their homes with private sector lenders to meet the cost of care. But, in fairness to Harney, the need for this fudge seem to be the air of unreality among the electorate.

http://www.ireland.com/newspaper/front/2006/0216/2668155734HM1OLDERPEOPLE.html A significant majority of people are opposed to older people having to sell or remortgage their home to help pay for long-term care, according to research presented before the Cabinet and seen by The Irish Times. Carl O'Brien and Liam Reid report.

Such equity-release schemes are among a number of options contained in an inter-departmental report being considered by the Government as part of its plans for a new, long-term care system for older people.

The unpublished research by the ESRI, which involved interviews with more than 2,000 people, found that 60 per cent of adults were opposed to any form of equity-release scheme. A small number (3.8 per cent) felt such schemes should be compulsory…..

Nuttzz

So, essentially, 60% of the population are saying that wealthy, debt free old people should have the cost of their care paid for by debt laden people including those with commitments in the form of children.

That assumes that because the have their own house they are wealthy, they have worked all their lives to pay their mortgage and pay taxes, when they were young they supported their elderly, now as they get older do we just tell them to bog off?

In any case there article says that people are opposed to old people having to sell off their homes i.e. it becomes compulsory to do that. I have no problem with people selling their homes to provide for themselves I do have a problem with people being forced to sell something they have worked all their life to pay for....

ishmael whale

That assumes that because the have their own house they are wealthy,

It assumes that their own house is wealth.

they have worked all their lives to pay their mortgage and pay taxes, when they were young they supported their elderly, now as they get older do we just tell them to bog off?

The short answer is yes. The demographics were different, as people had larger families so old people were a smaller portion of the population who lived shorter lives and had less generous provision. The demographics just don’t and can’t continue the same way, unless you are suggesting that we degrade the planet further by encouraging overpopulation so gramps pension doesn’t get squeezed.

I have no problem with people selling their homes to provide for themselves I do have a problem with people being forced to sell something they have worked all their life to pay for....

As noted, the scheme could be based on the idea of no-one being forced to sell anything in their lifetime, just the State taking its share of it after they die in respect of the services provided by the taxpayer. I don’t see the point of having a fetish over pretending that the cost of caring for the old should ignore the wealth tied up in their homes, particularly as it creates a pressure to transfer the cost onto people who do not have the same wealth.

Nevyn

Nuttzz wrote:

In any case there article says that people are opposed to old people having to sell off their homes i.e. it becomes compulsory to do that. I have no problem with people selling their homes to provide for themselves I do have a problem with people being forced to sell something they have worked all their life to pay for....

That is already happening if family can not make up the shortfall for to pay for nursing home care if the old persons pensions does not cover it the family will be advised to rent out or sell the old persons house to make up the shortfall.

Nuttzz

What if the housing bubble bursts? This plan assumes that house prices and the economy remain the same for a long time into the future this isn't guaranteed by any means.

People who have spent 40 odd years working and contributing to the state do not deserve to have the fruits of their labour taken away from them because of a housing bubble....

/edit I know what you are saying thaedydal, but a similar story in the indo says that one of the options is to make it compulsory, I have no problem with people making that decision for themselves but it shouldnt be done under duress

ishmael whale

Nuttzz wrote:

People who have spent 40 odd years working and contributing to the state do not deserve to have the fruits of their labour taken away from them because of a housing bubble....

You're looking at the wrong end of the telescope. It about the people working for the next forty years to protect someone else's inheritance. Be clear that our generation simply won't enjoy this largesse, because it won't exist in our generation. The immediate problem of care of the elderly has an immediate solution. We should use it and move on to things that are really a problem.

Nuttzz wrote:

I have no problem with people making that decision for themselves but it shouldnt be done under duress

Which is effectively the fudge we're ending up with, which is the State will arrive in gramps house with a bill saying "Nice place you got. Bet its worth a packet. Changing the subject completely, either you or your family will unfortunately need to stump up some moolah, because we're bit tight. You've no money. I see. Changing the subject again, ever thought about getting your house valued." and on and on until the wrinkly finally gets the message.

FX Meister

In the end it comes back to the same old government strategy, Make the people who work pay for the people who don't. Work hard all your life to pay for your home and then sell it to keep you in the olf folks home. Or spend the money instead of putting it into a mortgage and the tac payer will pay for you in the home.

Nevyn

and getting told that the nursing home will refuse to have your aging parent there any longer or will refuse to take them in the first place and the nursing home and the age worker/socails workers and helath board liasion are saying the house has to be sold to pay the bills if the family members can not pay the difference is not duress ?

With the age people are living to and the fact that most of thier children will have homes of thier own and when the issue of the
'family' home tends to be a cause for grief when the parents have passed over the situation needs to be looked at.
There was a time when family would take in the aging parent but with women going back into the work force when they're children are grown and the advanced age of elderly parents and thier increasing medical conditions this is not really an option.

I do think that we should have more retirement communites where the large 3/4 bed family home can be sold and an 2 bed aparment
which is more managible and in a complex that has a caretaker can be bought and the excess money be used for the eldery person /couple to be comfortible and to make plans with.
This can be hard for people to do, I know that esp as such complexes should be ideally in each community like the ones in finglas and cabra are so that the eldery person is still in the same place going to the same shops, still near what ever family is in the area.

But we tend to have an over emotional attchment to the 'family' home when a pratical solution is needed.
This would also free up houses for those starting out.

Nuttzz

If it become compulsory to do this then people will look at methods to avoid it, e.g. sell the house and spend it on that round the world trip and let the state pickup the bill when they get back or sell the house to the kids at below market value, writing something into the statute books is not the correct way to approach this problem.

ishmael whale

Nuttzz wrote:

If it become compulsory to do this then people will look at methods to avoid it

I take it at this stage we at least accept that there’s nothing in principle wrong with the wealth wrapped up in homes being used to fund care, when necessary. Hence, all the folderal about people working for forty years having some ill-defined entitlement to having the wealth represented by their home held sacrosanct need detain us no longer. That’s progress, at least.

All that’s at stake is the practical question of whether people are likely to follow a scorched earth policy of selling their home and blowing the entire proceeds, or whether a calmer outlook might prevail which would mean this approach would be effective in finding a source of funding for care of the elderly.

When faced with the practical situation, people may equally simply comply as the deal could be structured in such a way as to leave their life interest in the property – so in practical terms, they still own the house until they die. Also, the State will only be taking what’s due to them – so there’s always a prospect that a considerable portion of the wealth will actually remain to be inherited. In that situation, people may well take a more practical approach in the real world situation and not see a need for a dramatic burst of ‘spend spend spend’.

There’s any amount of practical ways to address practical difficulties. At least we seem to have established that there’s no reason in principle for 60% of people to rule this option out.

samb

I think it is a great idea. It is better than people have to release equity through the private sector. You could have it that it is payed only when the house is sold upon death. It need not pay for the care entirely but be a reasonable contribution.

ronbyrne2005

the whole system regarding pensions and old age care etc has to be rethought.i heard that theres 4 people working for every OAP now and in a few decades there will be only 2 working for every OAP/pensioner. in the past people died younger after a far shorter retirement and also as stated above families minded old people.maybe the state should pay for all old age home places with a means test,or maybe people should pay for their own private old age home if their children/families wont/cant look after them. it isnt equitable for people to have considerable wealth in the form of property which they dont live in as they are in a home and getting the 50k a year cost of home paid for by state.maybe increase prsi and give everyone free private old age homes .

Nuttzz

ishmael whale wrote:

I

When faced with the practical situation, people may equally simply comply as the deal could be structured in such a way as to leave their life interest in the property – so in practical terms, they still own the house until they die. Also, the State will only be taking what’s due to them – so there’s always a prospect that a considerable portion of the wealth will actually remain to be inherited. In that situation, people may well take a more practical approach in the real world situation and not see a need for a dramatic burst of ‘spend spend spend’.

To come back to one of my original points, what if the state is due more than the house is worth? I cant see the current housing bubble continue into infinity, does the state then tell the grieving family that we have taken the family home but you need to pay us another 10 grand? Theory is one thing practice is another

ishmael whale

Put it in even more stark terms - if an old person had no near relatives, and the value of the home was exhausted before they died, then we'd hardly envisage booting them out on the street. But, in that situation, at least the value of their house has contributed to the cost of care.

The key point, as ronbyrne2005 has said, is that the ratio of pensioners to population is changing, and that means our approach to financing has to change too. If we don't touch this source of funding, some alternative has to be found. Any suggestions?

Nevyn

There is already a way to chase after family memeber if the house is sold for considibly less then market value.