Care sector fears tax changes could threaten jobs

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Care sector fears tax changes could threaten jobs

The chair of a care association has said home care companies could make staff redundant to stay afloat following changes made in the Autumn Budget.

Prema Fairburn-Dorai, from Suffolk Care Association, said the government’s decision to lower the threshold at which companies start paying National Insurance for staff, from £9,100 a year to £5,000, would be “devastating” for the industry.

Analysis by the

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think tank said the changes could cause providers to increase prices for people who pay for their own care, stop accepting council-funded work, or fold.

Chancellor Rachel Reeves argued that

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but necessary to fund public services, including the NHS.

Prema Fairburn-Dorai says that the National Insurance changes will add £100,000 to the company’s annual costs [NIKKI FOX/BBC]

Ms Fairburn-Dorai, who owns and runs Primary Homecare in Suffolk, said lowering the earnings threshold – which will start in April – would cost an additional £615 per employee and would raise the overall operational costs by 10.2%.

The government also announced a rise in National Insurance contributions for employers from 13.8% to 15%.

Ms Fairburn-Dorai added the current climate was the “worst situation” her company had ever faced and the directors could not take a dividend or wages because the company could not “afford it”.

“It may mean making some staff redundant and slimming the business,” she said.

“The more staff you have, the more your overheads are.”

She added her company pays staff above the National Living Wage, but for other care companies a simultaneous 6.7% increase in the living wage could force them to “breaking point”.

“At least during Covid we had a small buffer, we were helped by government.

“This time round, it’s the biggest killer blow, and I think people are still in shock,” she said.

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Rebecca with her father Rob, whose brain is swollen from repeated head injuries [NIKKI FOX/BBC]

Rebecca’s father Rob has encephalitis, a condition that causes the brain to swell due to inflammation.

He is looked after by his family, but he needs staff carers to visit three times a day to provide personal care and hoist him into a chair or bed.

His daughter said she was not sure where she would be without his staff carers and believed care companies should be exempt from National Insurance rises.

“They’re caring for vulnerable people who will struggle to pay any more.

“Care is very expensive as it is. There are so many different implications on either the care companies or the people they’re caring for.”

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Derek says help from staff carers helps take the pressure off his wife who still works from home to support them [NIKKI FOX/BBC]

Lyn’s husband Derek, 76, is confined to a bed in his living room as part of his hip is missing. He contracted pneumonia and sepsis in hospital and is too unwell for a hip operation.

Lyn worries about their mental health if they were to lose their care package.

“I’ve been in a position where I’ve gone to attend Derek and the carers have turned up and I’ve just said I can’t cope, because it’s been a bad day for him and they go ‘leave it, just stand back Lyn, we’ll take over’.

“Just knowing I’ve got that, really helps,” she said.

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Care assistant Rhoda Machenga Mutimkulu has been in the care profession for two years after teaching at a school in China [NIKKI FOX/BBC]

Care assistant Rhoda Machenga Mutimkulu said that future support could suffer if social care was not prioritised.

“I think if people didn’t have proper care, honestly they would die. Their mental health would go down and they would not be able to have food or medication.

Companies such as Primary Homecare are funded largely by council contracts.

Beccy Hopfensperger, a councillor and cabinet member for adult social care at Suffolk County Council, said the authority was receiving £16.9m from the government to support the care sector.

She added, however, that sum was overshadowed by £35.3m increase in operational costs in the industry, which included rising demand for services, National Insurance increases, wage rises and inflation.

She said the council was raising the proportion of council tax ring-fenced for social care by the maximum amount.

“I think we have to ask the question of the government as to how they can support the care market and local councils.

“We need to take adult social care seriously… the nettle needs to be grasped, we need a long term, sustainable plan for social care, and it needs to happen quickly.”

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Conservative councillor Beccy Hopfensperger thinks the government’s long term care plan is happening too slowly [NIKKI FOX/BBC]

A government review of adult social care will complete in 2028.

A spokesperson for the Department of Health and Social Care said: “The Casey Commission will work to build consensus around the future of adult social care that is fair and affordable. The first report will be published next year.

“We are also taking action now by increasing funding to allow disabled people to stay in their homes.. and making available up to £3.7bn extra for local authorities in 2025-26.”

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