Pensioners who are still working will have to pay tax for the first time under the Prime Minister’s plan to fix the social care crisis.
From April 2023 workers over the age of 66 will pay 1.25% - part of a National Insurance tax hike - despite not having to pay any contributions under current tax regulations.
It comes as the state pension triple lock will be axed next year to block a £3billion pay rise for the elderly amid spiralling Covid costs.
Speaking to MPs in Parliament today, Boris Johnson said: “Our new levy will share the cost between individuals and businesses, and everyone will contribute according to their needs, including those above state pension age.”
From April 2023, a 1.25% "health and social care levy" will appear on people's pay checks.
Will you carry on working with the new tax in mind? Get in touch: emma.munbodh@mirror.co.uk
The money is being clawed back to help cover the cost of social care which the government says is currently costing elderly people their homes.
From October 2023 it will help fund the costs of social care by setting a cap on how much pensioners will be forced to pay.
Under the plan to fix the system, pensioners will still have to pay up to £86,000 for their care - but then the Government will cover the rest of the bill, Johnson said.
The money raised will fund a £36billion health package over three years.
At the moment anyone with more than £23,000 in the bank, or tied up in the value of their home has to foot the entire cost of their care, such as nursing homes or visits that spiral into the tens of thousands.
Anyone with assets between £20,000 and £100,000 will receive means-tested help from the Government.
Anyone with savings under £20,000 will not pay anything.
The PM's official spokesman said this will end the "unpredictable and catastrophic care costs" that drains life savings.
