Baroness Altmann says the move, proposed by the Resolution Foundation thinktank, would be a “huge mistake.”
If it went ahead, it could mean that those pensioners who work beyond state retirement age would be forced to pay a 12% National Insurance contribution on their earnings in addition to income tax. At present, NI is not imposed on pensioner workers past state retirement age.
Dr Altmann said: “Apparently, the Government may be considering imposing National Insurance payments on people working past state pension age, to raise revenue for social care. This would be a huge mistake and deeply unfair as a means of improving social care funding.”
She said the move, if it happened, would “replace one unfair system with a new unfair system.”
She agreed that the current system of social care funding is “unsustainable” but believes that hitting just those pensioners who are still working is not a solution.
It would introduce a “new unfairnesses”, she said, and would likely upset many core Conservative supporters.
According to her research only about one in ten pensioners continues working past state pension age and many are not all well off. Many older workers keep working because they do not have good pensions and are trying to make ends meet, she said.
She believes it would be wrong to target them and that “older workers should not be seen as a 'cash cow' to help solve a problem which needs a new national solution.
The Resolution Foundation believes that imposing NI on pensioner workers incomes would help pay for social care and improve “inter-generational” fairness. It proposes a series of tax measures to help younger people and reduce the tax burden on them while asking older people to pay more.