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In September 2021, the Government published its Plan for Health and Social Care. The Plan contains long-awaited proposals to tackle the challenges of adult social care and, in particular, the difficult issue of how that care should be funded.
Many people understandably take the view that they should not have to sell their homes to pay for their care. It is an emotive issue for people who have throughout their working lives paid their tax and national insurance and worked hard to pay-off mortgages, with the intention of passing on their properties to their children when they die.
The Government's proposal, which is now to be legislated, is to protect individuals and families against 'unpredictable and potentially catastrophic care costs' by introducing from October 2023 a cap of £86,000 for personal care costs over a person's lifetime.
Currently, a person with assets over £23,250 is usually required to pay for the full cost of their personal care. The Government is proposing to increase this threshold to £100,000. For people with assets between £20,000 and £100,000, the local authority will provide some assistance until the £86,000 contribution cap has been reached and then these people will be asked to contribute from their income. People with assets below £20,000 will have their care funded by the local authority with them contributing from their income only.
Since 2015, it has been possible for a person in care to defer the sale of their home, and the Government is proposing to review the existing deferred payments scheme to provide more flexibility to people to defer their care payments. However, one possible change to the scheme may be to charge interest on the deferred charges.
In addition, the Government is proposing to use existing legislation in the Care Act 2014 to help people who are self-funding their care to ask for local authority assistance in arranging better value care.
The Government has confirmed that the £86,000 cap only relates to care costs and not other costs such as accommodation and food. In addition, any top-up payments made by a relative towards care in a more expensive home will not count towards the cap.
The details of the new proposals will be set out in the new Health and Social Care Levy Acy 2021 which received Royal Assent on the 20th October, but some commentators are already saying that the Government will have to manage people's expectations. This is because they say that some people may think that they will not have to sell their homes at all under the new legislation, or that more of their assets will be protected than will in fact be the case.
One interesting point made is that the contributions to the lifetime cap of £86,000 are expected to be calculated at what will be the lower local authority set rates for care, and so if a more expensive home is chosen, the difference between what is paid by the resident and the local authority rate may not count towards the cap. Therefore, it has been said that the introduction of the cap may only have the impact of slowing-down the pace at which assets are used for care costs.
The information contained within this article is provided for information purposes only and does not constitute legal advice. Specialist legal advice should be taken in relation to specific circumstances.