Social care cost has not really been effectively tackled by successive UK governments to date. Many people who need access to care are aware of the current rules concerning personal funds to pay for that care. In essence currently anyone in England with assets over £23,250 must pay for their care in full. Below that level the relevant local authority will fund the necessary care costs.
There has been a lot of publicity regarding the future HM Government changes to how care should be funded in future, and effective from October 2023, the Government will introduce a new £86,000 cap on the amount anyone in England will need to spend on their personal care over their lifetime. It will be implemented using legislation already in place under the 2014 Care Act. As a result of this new cap, the intention is that people will no longer face unpredictable or unlimited care costs.
So, from October 2023, anyone with assets of less than £20,000 will not have to make any contribution for their care from their savings or the value of their home, ensuring those who are most vulnerable are protected. Anyone with assets of between £20,000 and £100,000 will be eligible for some means-tested support, helping people without substantial assets. The new upper capital limit of £100,000 is more than four times the current limit of £23,250, ensuring that many more people are eligible for some means-tested Local Authority support.
UK Government advice now states:
If someone needs care, Local Authorities will assess i) their care needs and which of those needs are eligible to be met by the Local Authority and ii) whether they should receive financial support to help with care costs, via a means test assessment. Like the current system, the means test will be based on total assets, including both the value of a person’s home and their savings. However, if a person needs to continue to live in their own home, it will be excluded from the assessment of total chargeable assets. This is known as the housing disregard and is unchanged from the current rules.
The new means test for adult social care will come into effect in October 2023 on the basis of a person’s income and savings in the following way.
- If a person’s total assets are over £100,000, full fees must be paid. The maximum that a person will have to pay over their lifetime towards personal care costs will be £86,000 as a result of the new cap. If by contributing towards care costs, the value of a person’s remaining assets falls below £100,000, they are likely to be eligible for some financial support. Once the £86,000 cap is reached, Local Authorities will pay for all eligible personal care costs. No-one will need to make a contribution from their income towards these care costs. People may choose to “top up” their care costs by paying the difference towards a more expensive service, but this will not count towards the cap.
- If a person’s total assets are between £20,000 and £100,000, their Local Authority is likely to fund some of their care. People will be expected to contribute towards the cost of their care from their income, but if that is not sufficient, they will contribute no more than 20 per cent of their chargeable assets per year. If by contributing towards care costs, the value of a person’s remaining assets falls below £20,000, then they would continue to pay a contribution from their income but nothing further from their assets.
- If a person’s total assets are less than £20,000, they will not have to pay anything for their care from their assets. However, people may still need to make a contribution towards their care costs from their income.