Pensioners are to be offered state loans so that they do not have to sell their own homes to cover the cost of residential care, under new Government plans.

People will be able to borrow money from councils at nominal interest rates to finance going into care and the cash would not have to be paid back until after they die.

The scheme, being introduced across England in April 2015, is intended to help around 40,000 people each year who are forced to sell their homes to cover care costs.

But critics are already attacking the strategy, arguing that families will still have to sell the property when their relative dies in order to pay back the loan and will also be landed with the interest.

The move is part of the Government’s blueprint for social care reform, which will be unveiled by Health Secretary Andrew Lansley.

It comes days after it emerged cross-party talks on how to reform care provision have broken down after ministers made clear funding decisions would not be taken until the spending review next year.

Labour has insisted the coalition’s pledges are “meaningless” without concrete plans for how they will be funded but Mr Lansley is pressing ahead.

It is also expected that the reforms will raise the threshold for means testing and set a cap on how much families will have to contribute before the state steps in.

The “universal deferred payment” scheme for care homes was first proposed by a Royal Commission more than a decade ago.

Since then, councils have been able to offer interest-free loans to people who face having to sell their home to pay for care but the new scheme will order councils to provide the loans.

Details will be negotiated between the Government and local authorities in the coming months, with the level of interest payments likely to be crucial.

The social care proposals are also expected to include initiatives to help carers and give people far more control over their own care.

The Government is keen for more pensioners to be looked after in their own homes, rather than go into nursing homes.

An additional £300m is being transferred from the NHS to social care over the next two year, in a bid to “improve integration” between the services.

Age UK said the Government’s social care white paper and draft bill are a “once in a generation opportunity” to improve care so that it is fairly funded.

Charity spokeswoman Elizabeth Feltoe told Sky News: “We would like the Government to agree to a cap on social care costs so you and I would only need to spend around £35,000 of our own wealth or income on care.

“We would also like the Government to introduce a new means test threshold of £100,000. That protects people from using all of their assets to pay for their care.”

Pauline Turner was forced by her local council to sell her mother’s bungalow to pay for care bills that have climbed to £96,000 in less than five years.

To make matters worse, her £50-a-week pension credit was stopped because her savings increased after the sale.

She said: “The Government are saying to us ‘Be thrifty, look after yourself, work hard and you will get rewarded’. Why should I be thrifty or why should my mother have been thrifty because she has lost everything she ever worked for. So why do we bother? The Government is sending out confusing messages here.”

According to Age UK, there was a £500m shortfall in local authority funded social care last year, and councils are cutting back further to save money.

Some will only pay to care for the most severely disabled adults and others have cut home help for daily tasks such as washing and dressing.

The long awaited social care reforms are expected to oblige councils in England to offer basic help to frail or disabled adults to end the so-called postcode lottery in services.

But the reforms are likely to cost £1.7bn a year at first and that will soar as the population ages.

Charities fear the Government will delay a decision over how to fund the reforms until the next Treasury spending review in 2013.

Saga, the over-50s campaign group, said the fiscal deficit was no excuse for not spending more on care.

http://news.sky.com/story/958599/care-home-costs-to-be-funded-by-state-loans