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Middle-class pensioners to lose benefits under Tory plan to fund social care

The Telegraph logo The Telegraph 6 days ago By Gordon Rayner, Political Editor and Steven Swinford, Deputy Political Editor
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Related video: UK PM pitches welfare cuts, migrant curbs in manifesto (Reuters)

Middle-class pensioners are to lose benefits under Conservative plans to fund social care, Theresa May will announce on Thursday.

The Conservative manifesto will set out plans to begin means-testing winter fuel payments and to charge more people who currently receive free care in their own home. 

The money saved from means-testing the annual heating handout, worth up to £300, will be used to help close the £2.8 billion social care funding gap. 

The Conservatives will also pass legislation to ensure nobody has to sell their home to pay for their care during their lifetime, and new rules will allow pensioners needing nursing home treatment to keep more of their assets.

The flagship policy marks a gamble as it risks angering core older Tory supporters. David Cameron repeatedly pledged to maintain universal pensioner benefits, but Mrs May’s team believes that pensioners can no longer be fully protected from austerity.

On Wednesday it was unclear whether the Prime Minister would also abandon the so-called triple-lock, which guarantees a rise in the state pension every year. 

Writing in Thursday's Telegraph, Mrs May defends the welfare cuts by saying she is prepared to “take the big, difficult decisions that are right for our country in the long term”.

She says the manifesto, which will be unveiled in West Yorkshire, will “confront the great challenges of our time”.

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The  Telegraph understands that the manifesto will also:

  1. Pledge to end the controversial policy of universal free school lunches for infants to fund an extra £1 billion per year for education – a funding commitment that will see every school receive more money;
  2.  Ditch the tax triple-lock that guaranteed no rises in income tax, national insurance or VAT, but will contain a general commitment to lower taxes;
  3. Keep a pledge to bring down immigration to the tens of thousands, but with no “arbitrary” deadline;
  4. Maintain the current policy of increasing the tax-free personal allowance to £12,500 by 2020 and the policy of increasing the 40p tax threshold to £50,000 by 2020;
  5. Eradicate the deficit by the middle of the next decade;
  6. Double the immigration skills charge – currently £1,000 per year – levied on companies for each non-EU national they employ. 

Acknowledging that her plans will prove unpopular with some pensioners, the Prime Minister will say: “People are rightly sceptical of politicians who claim to have easy answers to deeply complex problems. It is the responsibility of leaders to be straight with people about the challenges ahead and the hard work required to overcome them.”

By means-testing winter fuel payments, which were introduced by Gordon Brown in 1997 and stand at £200 (rising to £300 for over-80s), the Conservatives could save more than £1.7 billion if they restrict the payments only to those who are classed as living in fuel poverty. 

In 2015 Labour proposed a similar, but less far-reaching policy that would have removed the benefit from pensioners in higher tax brackets. It was criticised by the Tories at the time, who said it was unfair on those who had already retired.

The second part of the funding plan is to charge pensioners with assets of more than £100,000 for domiciliary care. For the first time, the value of pensioners’ homes will be taken into account when they are means-tested for care visits, meaning far more people will have to pay towards the cost.

At present around 870,000 people in the UK receive care visits in their homes, some of which is already privately funded. Mrs May will also emphasise her new policy of allowing all pensioners to keep assets of at least £100,000, rather than the current limit of £23,250, and legislating to ensure that nobody is forced out of their home to pay for their care. 

On schools, Mrs May will also head off a middle-class rebellion over a proposed new funding formula that would have taken money away from good schools to boost funding for poorly performing schools.

Extra money will now be found to ensure that no school will be worse off when the new formula kicks in. 

It will largely be paid for by scrapping universal free school meals for infants. School lunches for infants will now be means-tested as they are for older children. To soften the blow, all children will be offered free school breakfasts. 

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