Eldercare vouchers: an update

Thanks to tax breaks, childcare vouchers are used by about 200,000 employees. Yet there is little sign voucher schemes will be extended to help employees with elderly dependents, an issue that will loom larger than childcare as the number of elderly people needing care rises. John Charlton reports.

The Care Vouchers Campaign, which sought to persuade the main political parties to promise tax exemptions for a generic care voucher that would include eldercare, was launched in November 2007. It was sponsored by the major childcare voucher suppliers, Accor, Grass Roots, Computershare and Sodexo Pass, and large employers including BT, John Lewis, IBM and KPMG.

The campaigners were clear about what they wanted, declaring: “We call on the prime minister and the chancellor of the exchequer to put in place the tax exemption needed to make it – the generic care voucher – a reality.” Imagine their horror when, in September 2009, then prime minister Gordon Brown threatened to scale back the tax and national insurance contributions relief on childcare vouchers, to fund free childcare for under twos.

Although Brown backtracked, limiting the scaled-back relief to higher earners, the campaign for eldercare vouchers is now very much on the back burner.

But eldercare is not an issue that will wait much longer. According to Carers UK, more than three million employees now care for adults. A recent Chartered Institute of Personnel and Development (CIPD) survey, Focus on Caring at Work, found one-third of 2,000 employees polled had caring responsibilities, half of them looking after an adult.

Care vouchers under the new government

In the run-up to the general election, all three parties were keen to give their backing to the concept of generic care vouchers and were quick to acknowledge the problems thrown up by an ageing population.

The Conservatives proposed a one-off insurance premium of about £8,000, payable before retirement, to cover the cost of care-home services. They also promised to “work to design a system where people can top up their insurance premium to cover the cost of receiving care in their own home”.

The Liberal Democrats vowed to provide a week’s respite for the one million carers who spend 50 hours a week looking after a sick relative. They also proposed the setting up of a commission to “develop future proposals for long-term care that will attract all-party support and so be sustainable”.

But what now, in these times of coalition rule? According to McMath, while the new government recognises the need to address the problem, it doesn’t yet know how to, and is unlikely to do anything about it in the next two to three years due to prioritising the economy.

As for the Care Vouchers Campaign, says McMath, it will be busying itself lobbying new MPs and working to educate the new administration about the need for generic care vouchers. The campaign will also continue to work with non-governmental organisations, businesses and the main political parties to put forward the business case for the new-style vouchers.

This looks set to rise. The percentage of the population aged 65 or over rose from 15% in 1983 to 16% in 2008. That trend will almost certainly accelerate, with 18.2% of the UK population aged over 65 by 2016 and 20.6% by 2026. The fastest-growing segment of the population is the over-85s – there were 600,000 in 1985, 1.3 million in 2008, and by 2033 there will be 3.2 million.

Carers’ UK chief executive, Imelda Redmond, says: “By 2017, we will reach the tipping point for care when the numbers of older people needing care will outstrip the numbers of working-age family members currently available to meet that demand.”

This is not lost on employers, such as retailer John Lewis Partnership and professional services firm PricewaterhouseCoopers (PwC), that provide flexible working options enabling staff to take time off to look after adult dependents.

Indeed, under the Work and Families Act 2006, employees have a statutory right to request flexible working if they are caring for an adult who is a relative or who lives at the same address as them. Carers also have the right to time off work to care for dependents in an emergency.

It is likely that progressive employers will go beyond this. PwC has recently set up a Carers’ Network, where staff can raise and debate dependent care issues. BT has introduced a passport scheme, where employees create a document explaining their caring responsibilities and the potential impact on their work. This can be presented to managers if the employee finds it difficult to talk about their caring responsibilities.

Iain McMath, managing director of voucher specialist Sodexo Motivation Solutions, says he is “seeing a lot of companies asking us to implement a care voucher scheme even though there’s no tax incentive”. These schemes would be funded by the companies themselves – despite the lack of tax break, these employers have recognised the role the vouchers can play in recruitment and retention.

As McMath points out, the economy seems to be starting to recover and workers are beginning to think of moving on – anything that can help an organisation keep its best staff has got to be worth investing in.

Comments are closed.