Plans to scrap the two-tier system of long-term care for the elderly, which gives no help to thousands of middle-class families, will be outlined this week.

Ministers are proposing the creation of a universal system giving all families the same “basic entitlement” to help, with the same legal protection, right to an assessment of needs and help in navigating the complex fees of care homes, The Times has learnt.

Under the present means-tested system, anyone with a home or savings of £23,500 or more is classed as a “self-funder” and shut out from receiving help with finding a suitable care home, or even having their needs assessed by social services.

In a recent legal change, self-funders were even excluded from protection under the Human Rights Act. The Act was extended to protect elderly people from “unfair administrative process” if their fees were being paid by their local authority. That means self-funders can be evicted without an appeal and at short notice if there is an unresolved complaint or dispute with their care home.

Self-funders comprise 40 per cent of the 440,000 care-home residents in Britain, a proportion that has grown as property prices have risen. The two-tier system means that many thousands of relatives have to assess care-home standards and fees themselves.

Ministers will say that, under a new system, no one will be turned away when they seek help and a “tangible” offer of help will be made to everyone, regardless of their wealth. The plans will also include radical ideas on how to pay for care.

The prospect of a universal system has been welcomed by charities. Michelle Mitchell, charity director for Age Concern and Help the Aged, said: “Older people and their relatives are usually offered little, if any, help and support to find the best care available, and are also likely to face problems should they want to make a complaint.

“Another real worry for people who are paying for their own care-home place is that if they speak out they could be thrown out. Often when something goes wrong, no external agency will take responsibility for investigating the complaint. They should have somewhere to turn if they are not happy.”

The proposals, to be published in a Green Paper, will include an “age insurance” scheme. Under the present means-tested system, thousands of pensioners each year have to sell their homes or use their savings to fund long-term care, which the Government will say is unfair and unsustainable, given the rapidly ageing population.

Under the proposals, those who want to protect their homes or savings would pay into a scheme that would then foot the bill for all members who required long-term residential care. A range of payment options will be set out. One option is for a prearranged sum of about £12,000 to be deducted from a member’s estate after death. Another is for payments to be made during a person’s working life.

The average stay in a home is two years, with an average bill of £25,000 a year.

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