Social Care & Government Funding

Category: Financial Life Planning & Saving & social care

When is a cap not a cap?

When it’s Government trying to deal with social care funding.

I’m sure you will have seen articles in the media about the new £86,000 limit, which is the maximum anyone will have to pay for residential or nursing care. That all sounds simple & straightforward, but sadly it’s much more complicated than that.

First of all, the good news:

  • From October 2023 new means tested limits will come into force. Instead of having to pay for all care if assets are above £23,250, an individual would only be expected to pay for all their care if these were more than £100,000. And people would only start to contribute towards their care if their assets were more than £20,000, not £14,250, as at present. People with assets of between £20,000 and £100,000 would contribute towards the costs of their care on a sliding scale. *
  • If someone does have to contribute towards the costs of their care, there would now be a limit on how much they are expected to pay over their lifetime. This cap will be set at £86,000. Once an individual has spent that amount, the government would take over paying their care costs.
  • At last, there is finally an attempt to address a problem which has been ducked for more than a decade.

Read the small print:

  • The cap only applies to the costs of Personal Care. Residential care fees will be made up of personal and accommodation costs. The latter are not included, and even after reaching the cap, people will still need to pay these.
  • The figure only applies to Eligible Needs, as defined by the Local Authority. Anything beyond these will not be counted. In February 2020, Age UKidentified that 23 per cent of care requests were rejected on the grounds that the applicant failed to meet the eligibility criteria –equivalent to 80 people per hour.
  • Only the notional amount of what the Local Authority would have paid is included, which may not necessarily be the same as people are actually paying.
  • Any costs accrued before October 2023 are not taken into account

This means that most people are going to pay significantly more than that £86,000, and many will still be forced to sell the family home, although not necessarily in their lifetime, but that is the case today.

Older people and their families are more than ever going to need qualified professional advice as to how to fund their care and to navigate the complexities of NHS and local authority provision.

* This applies only to England. Social care is a devolved matter, and the means tested benefit  levels quoted above are already different to this in Scotland, Wales and Northern Ireland. The implications of the proposed changes are not yet clear in these countries.

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