What will the government’s proposals mean for the social care system?

The government’s adult social care proposals, announced in September 2021, are a good step towards reform, if not the giant stride that was needed to genuinely ‘fix’ the system, as the Prime Minister promised.

This is a quick guide to how the social care system works now – and how the government’s new plan would change it.

How the social care system currently works

The current system is needs and means tested

Social care is not like the NHS, which is free at the point of need. Instead, before an individual can receive publicly funded adult social care they will be assessed to make sure their needs are high enough and their assets – for example, their savings or home – are low enough.

Many people have to pay for their care from their assets – their home and savings

The rules and regulations covering who is charged and how much they are charged are really complicated and have lots of caveats and exceptions so what follows is a basic summary.

If an individual is assessed as needing care in a care home, they will have to pay for it themselves if they have assets worth more than £23,250. If they are assessed as needing care in their own home, the £23,250 threshold still applies but the value of their home is no longer taken in to account.

If they have assets below £23,250 but above £14,250 they will be charged a proportion of the costs of their care.

People may also have to contribute to their care from any income they have

Even if an individual does not have to contribute to the costs of their care from their assets, they may still have to contribute from any income they might have. For example, if someone is in a care home they may contribute all their income (until the costs of the care are covered), apart from £24.90 a week for expenses. If someone receives care at home, they may contribute all their income (until the costs of their care are covered), apart from a sum no higher than the Minimum Income Guarantee, which varies according to age and other circumstances. This figure has not been rising in line with inflation.

If people are not eligible for publicly funded care, there is no limit on how much they might have to pay privately

If an individual has assets above the £23,250 threshold, they have to pay for their care, rely on family or friends, or go without care. If people do pay for themselves, there is no limit to how much they might have to pay over their remaining lifetime. The average cost of a care home in England is around £35,000 a year and some people spend many years in care. So, it is quite possible to end up paying ‘catastrophic costs’ of £100,000 or more. In 2011, the Dilnot Commission estimated that 1 in 10 people might pay more than £100,000.

How the government’s proposals would change the social care system

The government’s proposals would make the means test more generous

Instead of having to pay for all their care if their assets are above £23,250, from October 2023 an individual would only pay for all their care if their assets 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. People with assets of between £100,000 and £20,000 would contribute towards the costs of their care on a sliding scale.

The levels of the Minimum Income Guarantee and the Personal Expenses Allowance in care homes will also start to rise with inflation from April 2022.

The proposals would also set a ‘cap’ on the amount an individual would pay for care in their lifetime

If someone has to contribute towards the costs of their care, there would now be a limit – a cap – 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. And in practice many people with medium to low levels of assets would spend less than that before they reached the cap. This is because the means test is more generous, and people who have assets of less than £100,000 would only be a contributing a proportion of their full care costs, with the government making up the difference.

There are some caveats

The cap would only cover the cost of a care home that an individual’s local authority was willing to pay for (not, for example, a more expensive one, even if it would be more convenient). Or if an individual receives home care, it would only cover the number of hours their local authority thinks they need at the price it is willing to pay. And it would not cover the cost-of-living expenses in a care home (meals, etc). And all these figures will change over time with inflation.

What else is in the reform package?

There are other measures in the reform package, including one to ensure that people who pay for their own care get the best deal by letting them ask their local authority to arrange their care.

There are also promises to boost career progression in the adult social care workforce, support unpaid carers, invest in housing, improve information and oversee the social care performance of local authorities.