The Government recently provided fuller details about its proposals for the future funding of long-term social care.
Social care covers a wide range of services, from help getting into and out of bed to nursing home care. In most cases, social care is means-tested and carried out by local councils.
There were three headline changes announced by the Government which at first sight appear to be more generous that they actually are. These were as follows:-
1. A lifetime cap on care costs set at £75,000
The Government has said that it will limit to £75,000 the amount anyone has to pay for care during their lifetime. This cap, however, will apply only to the cost of the care that people receive; it does not include their ‘hotel costs’ (i.e. bed and board). These will be charged separately and be subject to different rules.
2. An increase to £123,000 in the upper limit of the means test for people entering into residential care.
At the moment, your capital and savings below £14,250 are disregarded in the means test. If you have between £14,250 and £23,250 in capital and savings and your care reaches the threshold set by the Local Authority, the council will subsidise your care costs according to a scale. This scale provides that a person has a deemed income of £1 for every £250 capital between the two limits. The Government has announced that it will raise the upper limit from £23,250 to £123,000. The ‘deemed income’ rule will continue to apply so that, on a figure of £123,000, this will amount to a deemed income of £399.00 per week.
3. Capping ‘hotel costs’ in care homes
The final change the Government announced is that it would limit ‘hotel costs’ to £12,000 a year for everyone, and it will introduce a ‘national’ means test. The intention is that there will be a national eligibility criteria that will apply to everyone, rather than individual local councils being able to set their own thresholds of seriousness of care resulting in a ‘postcode lottery’. The spending on care and support will be ‘metered’ by your local council. In order for your meter to start, you must first meet the new national criteria for care. The council will decide how much support you require and set a budget for this. The amount that will count towards your cap will be based on the council’s assessed figure, rather than the actual amount you spend. In many cases, this figure will be less than the amount people are actually charged. People will often wish to pay a higher figure for a higher level of comfort.
Currently, local councils pay on average about £500 a week for residential care and hotel costs. If your hotel costs are capped at £12,000 a year, this amounts to just under £230 per week. This leaves £270 a week to be found from your own pocket to pay for your care until you have spent £75,000. This would take more than 5 years. Most people stay in care for between 2 and 3 years.
The new rules are due to come into force in 2017.
For further advice and information, please contact our Wills, Trusts and Probate team on: enquiries@blasermills.co.uk