- Prime Minister pledges to tackle NHS Covid backlogs and cut waiting times with £36 billion for health and social care
- ‘Responsible, fair, and necessary’ action to provide the biggest catch-up programme for the NHS and reform to adult social care
- NHS capacity to increase to 110% of planned activity levels by 2023/2024: more appointments, treatments, and operations
- Social care reform plan to end catastrophic costs for people across the country, and include extra investment in care sector to improve training and support
- Funded by a new 1.25% Health and Social Care Levy on working adults and an equivalent rise in the rates of dividend tax
The Prime Minister sets out ‘responsible, fair, and necessary plans’ to tackle Covid backlogs, reform adult social care, and bring the health and social care system closer together. £36 billion is to be invested in the health and care system over the next three years.
It is claimed that ‘successive governments have failed to provide a long-term solution for social care’. The system will be reformed, ending unpredictable and catastrophic care costs faced by thousands, and making the system fairer for all.
Health and Social Care Levy
From April 2022, the government is introducing a new, UK-wide 1.25 per cent Health and Social Care Levy, ringfenced for health and social care. This will initially be based on National Insurance contributions (NICs) and from 2023 will be separate.
All working adults including those over state pension age
To ensure everyone contributes fairly, all working adults, including those over the state pension age, will pay the levy.
And dividends
The rates of dividend tax will also increase by 1.25% to help fund this package.
Every individual will contribute according to their means. Those who earn more pay more, with the highest earning 14 per cent of people paying around half the revenues.
And employers
Employers, who benefit from a healthy workforce and a tax-payer funded health service, will be asked to contribute so the costs are more widely shared.
Record £36 billion investment to reform NHS and Social Care
This will raise around £12 billion in extra funding per year, to be invested in frontline health and social care across the UK over the next three years.
The pandemic put unprecedented pressure on the NHS. The number of patients waiting for elective surgery and routine treatment in England is now at a record high of 5.5 million. This could reach 13 million by the end of the year if left unchecked. Before the pandemic, nine out of ten were waiting fewer than 25 weeks in England. This has now risen to 44 weeks.
To fix this, the NHS needs to be able to offer more appointments, operations, and treatments. Rather than simply plugging the gaps, new, innovative practices must be pushed forward so patients continue to receive the best possible care.
The new funding is expected to fund an extra 9 million checks, scans, and operations. The NHS long term plan committed to increasing activity year on year. In recognition of pressures from Covid, this will now increase to 110% of the planned activity levels by 2023/24.
This is in addition to our historic settlement for the NHS in 2018, which will see its budget rise by £33.9 billion a year by 2023/24.
This is a significant, long-term increase in public spending, which will directly improve people’s lives.
Speaking in the House, Prime Minister, Boris Johnson:
You can’t fix the Covid backlogs without giving the NHS the money it needs. You can’t fix the NHS without fixing social care, you can’t fix social care without removing the fear of losing everything to pay for it, and you can’t fix health and social care without long-term reform. The plan I am setting out today will fix all of these problems together.
Chancellor of the Exchequer Rishi Sunak:
We’re tackling the NHS backlog and taking decisive action to fix our broken social care system.
This significant £12bn-a-year long-term increase in public spending will improve people’s lives across the UK – but our health and social care systems cannot be rebuilt without difficult decisions.
The new Health and Social Care Levy is the necessary and responsible thing to do to protect the NHS, sharing the cost between businesses and individuals and ensuring those earning more pay more.
Amanda Pritchard, NHS chief executive:
It’s absolutely right that NHS staff, who have worked tirelessly throughout the pandemic to care for hundreds of thousands of Covid patients in hospital, get strong backing to recover routine services and begin to tackle the Covid backlog.
The pandemic is still with us and we will have to live with the impact of Covid for some time, so the additional funding confirmed this week will help meet those additional costs, and give the NHS clarity for the coming years while delivering millions more of the vital checks, tests and operations that patients need.
Health and Social Care Secretary, Sajid Javid:
Our nurses, doctors and care workers have worked tirelessly throughout the pandemic in our hour of need.
But the pandemic has taken its toll – waiting times are longer than ever before and social care is under even greater pressure.
This additional funding is a critical investment in our country’s future – it will give the NHS the extra capacity it needs to get back on its feet and is a vital first step in the reform of our broken care system.
Currently, families live with the fear of losing everything they own – including potentially a lifetime’s worth of savings. Around one in seven must pay over £100,000 for care, with bills falling indiscriminately on some of the sickest and most vulnerable. Following the announcement no one in England will now have to pay more than £86,000 in care costs over the course of their lifetime. This is equivalent to around three years in care.
The government will support those without savings – with the state covering all care costs for anyone with assets under £20,000. Anyone with assets between £20,000 and £100,000 will be expected to contribute to the cost of their care but will also receive state support, which will be means-tested. The new £100,000 limit is over 4 times higher than the current limit of £23,250, meaning many more people will be eligible for support than under the current system.
The social care workforce will receive new training and qualification opportunities, so they have the opportunity to progress and improve, while providing an even better standard of care.
The government is to set out a detailed plan later in the autumn to enable Local Authorities and other providers to invest in technology, innovative methods of care and in their workforce.
PAYadvice.UK 7/9/2021
One thought on “New 1.25% Health and Social Care Levy – National Insurance and Dividends”