You may have seen in the news of late about a change in National Insurance payments – a 1.25% across-the-board raise in April 2022 will be used to fund social care in England. Social care supports elderly and disabled adults of all ages with non-clinical needs – not just in residential care homes, but also for personal care services in their own homes, day centres or supported housing.
Unlike the NHS, social care has no dedicated funding and is paid for by local authorities – placing pressure on their budgets to find adequate resources. With the rise in NI expected to raise almost £36bn over the next three years, the government sees this as an opportunity for care providers to deliver more (and better) services to those who need it.
Here, we’re going to break down the changes within the social care system, what it means for you (or your loved ones), and how it’s all going to be paid for.
What are the changes to social care in England?
The current system (which applies before October 2023) stipulates that if a person’s assets are above £23,250, the local council won’t be able to offer help towards care costs. It’s only people with assets less than £14,250 that receive full financial support – so if you or a loved one needs residential care (for example), the value of their property may be included in the means test. This has been seen by many as the reason for the funding gap that created the social care crisis – forcing some to sell their homes to pay for their care.
- From October 2023, regardless of asset value, people will no longer pay more than £86,000 in care costs (that is, for actual care, rather than accommodation) over their lifetime.
- Once someone reaches the £86,000 cap, ongoing costs for personal care will be paid for by local authorities.
- Those who have between £20,000 and £100,000 in assets will get means-tested help towards costs from their local council.
- People who own less than £20,000 will not have to pay towards care costs from their assets – but may have to make contributions from their income.
How will the new social care system be funded?
The 1.25% rise in National Insurance (NI) applies to the pay of working people and their employers – from next April:
- The 1.25% rise will become a separate tax – called the ‘Health and Social care Levy’ it will show up on payslips.
- Unlike NI, the levy will also be paid by people who continue to work beyond retirement age (set at 66).
- Shareholders will also have to pay 1.25% more in tax on the profits they make.
- The changes will cost £255 a year for someone earning £30,000, and £505 a year for someone on £50,000.
How it will affect people already in care
It’s important to remember that the changes won’t apply until October 2023, so anyone already in the care system won’t benefit from the changes, nor will they be backdated. Even once the cap has come into effect, if they cannot pay the first £86,000 of care costs from their income or cash savings, selling/downsizing their home may be their only option to fund their share of the cost.
To avoid people being forced to selling their homes, the government wants to extend the use of deferred payment agreements (DPAs). First introduced in 2015, a DPA is a loan that covers care costs upfront – it is only paid back when the person passes on, and their home is sold to repay the loan. However, it should be noted that the loan is usually paid back with interest and other fees (such as admin costs) may also apply. We strongly advise you to contact care experts for more information if this is the case for you or a loved one.
How we at Gabriel’s Angels can help with your social care needs
Here at Gabriel’s Angels, we can provide all the advice and support you or your loved one needs to ensure dignified care.
As a local family-owned business, ‘family’ is very much the centre of our ethos – this is why we have designed our personal care services to the same high standard; our clients are assured of exemplary care and improved quality of life, while the training our staff undertake continually evolves based on the most up to date industry requirements.
Whether it’s additional help with their daily care, companionship, administration of medication or assistance with more complex conditions, we can provide the right service for you. Our dedicated Care Managers, for example, can provide highly tailored person-centred care, giving you complete peace of mind that you can go about your daily routines without major changes.
Please feel free to browse our website for further information on our services – if you would like to learn more about them or need advice on how the changes to the social care system may affect you, why not get in touch with us today?