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Loans for the elderly: Govt to outline residential care plans

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The government is to announce details of a deferred payment scheme for residential care for the elderly, which will allow councils to lend individuals money to pay for care, then recoup the money when their house is sold after their death.

The health secretary Andrew Lansley, who will launch the government’s white paper on social care on Wednesday, said the scheme will “end the scandal of older people being forced to sell their homes” to pay for care.

Under the proposal, first outlined as part of the Dilnot Commission’s report a year ago, the elderly and vulnerable will be allowed to borrow the cash to pay for residential care from councils before they go into a care home.

The measure is the only part of the Dilnot commission’s report which will be enacted, according to reports.

Two key proposals – capping the total cost of care to £35,000 and extending support for the elderly with assets of £100,000, up from the current limit of £23,250 – will only be supported “in principle”.

It is understood these proposals have been blocked by the Treasury on the grounds of cost: while the two would cost nearly £1.7bn, the deferred payment scheme is self-financing as people pay interest on the loan.

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