The current adult social care system is in crisis. Existing funding mechanisms are unfair, requiring those who have worked hard and saved to, not only pay for their own care, but to supplement the care of others too, because of the gap between what local authorities allocate per adult per week (£490) and what care actually costs (£600).
The government is set to publish a green paper in the Autumn that will detail proposals to tackle the funding gap in adult social care provision, which is estimated to reach £3.5 billion by 2025. Care ISAs and auto-enrolment pension-style systems have been put forward as possible solutions, along with increases in tax.
Another option being considered is the introduction of a salary sacrifice scheme. Similar in principal to childcare vouchers, adult social care vouchers would empower working-age people to save in a tax-efficient manner for their or a dependant's future care needs.
Regardless of an organisation’s size or sector, the current adult social care funding crisis will affect all workforces, either directly in how employees will access and pay for care provision in the future, or indirectly in how employees will support and fund a dependant’s care needs. The latter would potentially contribute to increased absenteeism and decreased wellbeing and productivity.
Many businesses will already be tailoring their schemes to help their ageing workforce prepare for life after work. But what about tomorrow’s older employees? Or employees who may take on the responsibility for co-ordinating and financing the care of a loved one in the future? A tax-efficient means of saving for future care needs represents an attractive benefit for many working-age people. It should also represent an opportunity for employers to differentiate themselves from the competition and supplement existing benefits formulae with schemes that will support recruitment, retention, motivation, morale, productivity and profitability.
Introducing an adult social care voucher scheme would be straightforward for businesses and HR professionals alike. The tried, tested and popular template for it exists in the form of childcare vouchers, which have helped more than 600,000 families since their introduction.
In addition, the cost of administering the scheme would be offset by National Insurance savings, and the resource required to manage the scheme would be minimal. This is because the proposed scheme would be classed as a non-taxable benefit, requiring little in the way of paperwork for either employer or employee.
Understanding the current climate in adult social care, and the radical funding reform that will hopefully result following the publication of the government’s green paper, is crucial in the bid to provide well-rounded and relevant additions to existing employee benefits frameworks.
Giving employees the autonomy to decide how their future care needs, or those of a loved one, are funded and delivered is a precious gift and somewhat of a no-brainer.
John Woodward is founder of Busy Bees Benefits and a campaigner for the introduction of adult social care vouchers
