Changes to care funding – how does it affect me?

Cap on adult social care costs

The government has announced a cap on the amount that people have to pay for their care costs.  From October 2023, it is proposed that no one will pay more than £86,000 towards the cost of their own care during their lifetime.

It is important to note that the lifetime cap of £86,000 only applies to care costs. People will still be expected to contribute towards their accommodation and daily living costs. Contributions to care costs that have been paid before October 2023 will also be excluded.

It is also worth noting that the capped costs do not refer to what someone actually pays for their own care, but rather it is calculated based on what their local authority would pay if they were funding the care (excluding daily living and accommodation costs).

Means-tested system

The current means-tested approach means that only those with savings less than £14,250 do not have to pay for their care (although they may have to make contributions from any income). Under the new system, this lower threshold is increased to £20,000, with the upper limit, where people become eligible for some means-tested support, increasing to £100,000. This is over four times the previous upper limit of £23,250.

For those with assets worth in between £20,000 and £100,000, they will be eligible for some means-tested support, but it is likely to be tariff-led in the same way as the current system, meaning that many will still be required to use large proportions of their assets (including income) to cover the cost of their care.

Fair rate

The new proposals also address the current situation where people self-funding their care pay considerably more for their care than those funded by councils or under the NHS (under continuing care). The government has said it will implement 18(3) of the Care Act 2014 in full, meaning that councils will be required to arrange care in a care home for those self-funders with eligible needs who request that they do so. Councils have been able to benefit from their bulk purchasing power to secure lower rates for state-funded residents; these new proposals aspire to a convergence of the costs paid by self-funders and those paid by the state.

If you need advice on how you can incorporate some long-term care planning in your Will, please contact Tammie Woods.