We can fund social care without raising national insurance

·3-min read
<span>Photograph: James Veysey/Rex/Shutterstock</span>
Photograph: James Veysey/Rex/Shutterstock

The government’s consideration of a rise in national insurance presents an ideal opportunity to question the unfairness of the current 12% and 2% NI rate levels (Ministers mull national insurance rise to fund social care, 19 July). Employee NI contributions (NICs) are no different to income tax. We know this because HMRC’s annual tax summaries, as sent to every taxpayer in the land, combine income tax and NICs in calculating how our taxes have contributed to the full range of government spending.

The specific text reads: “The information on this page shows how your income tax and national insurance contributions were spent … The list does not include indirect taxes such as VAT and other duties.” It then lists how much each of us has individually paid towards the full range of government expenditure on welfare, education, defence, etc.

So there is no reason at all for the poorest in the land to be paying NICs at a rate of 12% on a major element of their income, while the richest are paying just 2% on a major element of theirs, for what is simply a direct tax on income, no different to income tax. I suggest the government should “balance up to level up” and require all NICs to be set at the same rate – and at the same time raise revenue for better social care.
Neil Hornsby
Inverness

• I agree with Ryan Shorthouse of the thinktank Bright Blue (Report, 20 July) that an increase to NI rather than income tax is not the way forward to fund social care. But the argument that those receiving the care would not be paying for it ignores the fact that older people have paid tax and NI for 40-plus years of their lives. One day the young will be old.

The need for social care is often the result of long-term medical conditions such as Parkinson’s, Alzheimer’s and arthritis, which the NHS has no cures for. A medical condition such as cancer would be funded. Pay for social care by linking pensions to inflation only, ending rich people’s ability to avoid tax, and taxing global online companies.
Moira Sykes
Didsbury, Lancashire

• While ministers mull increasing NI to pay for social care, I have argued that NI should be abolished and the equivalent revenue raised through income tax. Every citizen should receive a universal basic state pension to replace the current unfair NI-based qualification.

NI is a hypothecated tax that yields no legal entitlement to benefits. It is regressive, falling hardest on the lowest-paid – between £9,500 and £50,000 of earned income, the rate for most is 12%. Above that, the rate is just 2%. There’s no NI payable for those above the state pension age or on unearned income such as from rentals or investments. Now, who does this Tory proposal benefit?
Prof Rebecca Boden
Hebden Bridge, West Yorkshire

• A 3% NI charge on occupational and private pensions payments would raise about £5bn a year. This should be easy to collect through company pension systems. It does not affect people who are reliant solely on state pensions. For people with these pension sources, it would typically reduce income by no more than 1.5%. It is legitimate in that it claws back a small proportion of the tax relief that built the pension pots.

It places the cost of social care on the potential users. With £500m from NI charged on earned income for pensioners, the £6bn cost would be almost met.
David Nunn
Bristol

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