Changes to social care
Changes to the way we pay for social care were announced earlier this month as part of The Health and Social Care Levy Bill 2021-22. From April 2022, the UK government is aiming to raise £12 billion a year for three years to cover the costs of health and social care reform.
The new levy will be built from increased national insurance contributions and dividend taxes. These funds should ensure that no one will have to pay more than £86,000 over their lifetime in care costs. The highly anticipated reform of adult social care funding is due to come into force in October 2023.
A cap on care fees was recommend ten years ago by the Dilnot Commission but unfortunately it was not implemented, leaving families facing significant costs. Council support for care costs is currently only available to those with the lowest means, and the upper and lower capital limits that apply haven’t changed since 2010.
The current system
If you need care and you have assets above £23,250, you will be deemed to be self-funding. The council won’t help with your care costs.
If you have assets of £14,250 or less, you will receive full funding from the council.
If you have assets between £14,250 and £23,250 you will be eligible for some council support, but will also have to make a contribution.
The means test will include the value of your property unless one of the exceptions or disregards applies.
The new proposals
The upper limit is going to increase from £23,250 to £100,000. If you have assets above £100,000 you will be completely self-funding. However, the maximum you will have to pay over your lifetime will be capped at £86,000.
The lower limit is going to increase from £14,250 to £20,000. If you have assets of £20,000 or less, you won’t have to pay anything from your capital towards your care.
If you have assets between £20,000 and £100,000, you will be eligible for some council support but will still have to make a contribution – it is likely that this will be based on income.
A note of caution
The cap is only going to apply to personal care costs. This means that daily living costs, like food, accommodation, and laundry won’t count towards the £86,000. Also, if you choose a care home that costs more than the council calculate as the average, the extra you pay won’t count towards the £86,000.
And if you are already paying for care, or need to start to do so before October 2023, you won’t benefit from the new means test or the cap.
NHS funding
If you have significant medical needs, the full cost of your care may be met by the NHS. If you are eligible for NHS Continuing Healthcare, then there is no means test – your care will be arranged and fully funded by the NHS.
There is a separate needs assessment and process to go through to see if you qualify for this support which won’t change when the new social care reforms come into force.