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.
Comments
What ever happened to the original purpose of National Insurance contributions the elderly generations have paid all their working lives please?
I @ 77yrs of age understood that "those contributions would look after them in old age"? I refer to many much older than me.
Bearing in mind some elderly have gone through 2 x World Wars etc and "done their bit for this Country and done what the Governments of their day requested"
The political way money is spent or abused is not their fault and we should look to Germany care and other Countries before we make elderly feel a burden on the state!
Hi Chris,
Thanks for your question. Unfortunately, the cap is not retrospective and will therefore not apply to any funds being paid up to October 2023 or previously paid by current care home residents. The cap comes into force in October 2023 so only money paid after this time will count towards the cap.
This is an important issue for us. Keep up to date with all our commentary and analysis on social care finance via this page: https://www.kingsfund.org.uk/topics/social-care-finances
Kind regards,
Lizzie
What about existing residents in Care Homes? if by October 2023 they have already spent over £86,000 does this automatically stop?
This is how they should have solved the problem. ‘Social Care’ by its very definition means care for everyone. Therefore everyone regardless of what they own should contribute 10% of their estate to be spent on care for everyone, regardless on whether they reach old age or disability or use it. And just so you know I’m well off and would gladly do this to help others.
My father was in a care home (not the most expensive) with dementia for 7 years at a cost of over £350,000. Very fortunately he was able to pay for his care himself but many can't. My feeling is that it was right he contribute to his care because he could afford it but he should have had some financial support because he was ill and had to have the care If he had had cancer it wouldn't have been a problem because he would not necessarily have had to go into a home. Under the new proposals he would still not qualify for any financial help.
The Governments proposal to introduce the £86,000 cap 'for everyone' is a sham and I hope the Government reject it. The proposal has so many hidden caveats and smaller details that are not being made clear to people and 'everyone' clearly won't get it. How a vote can be conducted on this within such a short space of time without appropriate scrutiny is shameful. Usual Johnson Bluster.
As I see it the proposal will not help many people with dementia who are in the care community who may not qualify for nursing care but 'social' care because they are ill and need to be kept safe. The care includes accommodation food etc currently not included in the proposal so how would that work? Also if a person is eligilble for the funding they can only go to a care home chosen by the Local Authority and not a place of their choosing which may be more expensive. If you have assets of between £20,000 and £100,000 the amount you qualify for will be means tested anyway.
In addition, the proposals do nothing to 'fix' the crumbling social care system as Johnson claims. The social care system needs more staff, better working conditions, better staff pay and a more efficient and effective structure working alongside the NHS and other stakeholders. Working towards providing people/and carers with the best care possible in their own homes for as long as possible in whatever situation will save thousands When people eventually find they do need residential or nursing care it should be of the highest standard wherever they go and paid for on a financial means tested basis based on a much higher level of their assets not just £20,000. This way the less well off families benefit and are able to keep some of their assets and the wealthier people pay.
This would be the most effective way of dealing with the continuing health crisis within our Social Services sector that needs sorting.
Does the £100,00 of Assets refer to one’s home as well as investments and money in the bank etc. It would mean that only people living in council houses or other rented accommodation were eligible?
I'm a friends and family carer, someone who cares for 3 of my family members at home, not in a care home, hospital etc.
Which can mean anything from giving personal care to CPR to mental health support as well as domestic stuff, shopping etc.
For which the government "pays" me 67.60 a week.
So will this new idea give me extra training and income or even allow me some personal time ?
I seriously doubt it.
Dad currently lives in a care home and due to him working paying national insurance and towards a pension and saving all his life . He has to pay all his care home fees.
He has vascular and mixed dementia. COPD probably due to working many years down mines. Also has atrial fibrillation. And stage 3 kidney disease. He has macular degeneration in both eyes ( poor eye site) and has had 2 knee replacement and has stenosis iOS the spine he can hardly walk. Without help he is doubly incontinent . High risk of falls, cannot dress or independently feed himself. He constantly gets chest and urine infection leading to delirium and when this happens he becomes more disoriented and irritated and sometimes aggressive. Yet under the long term care assessment he is not deemed disabled enough to qualify for help with long term care.it Beggars belief.
He gets nursing funding paid directly to the nursing home as he had 2 falls hitting his head and 2 brain bleeds and had to be taken off blood thinners so is high risk of stroke and heart attack.
This is about £150 pounds per week.
But he still has to pay £750 per week or £120 per day approximately for residential fees these include carers looking after him to see to and help with all the above needs.
Now what I want to know is in the proposed changes will he still have to pay these residential fees baring in mind if he was healthy and did not have as many disabilities he would not be in a care home in the first place
How will the break fees down to cost of care and food etc
Could you confirm the point in the article which says those with assets of under £100,000 will have paid out less that £86,000 when they reach the £86,000 cap? I read the printed social care changes as saying everyone will have paid out £86,000 when they reach the cap...but some will reach it more quickly than others, as they will have been paying less for their care and it will have taken longer to reach £86,000. Thanks for the help.
In the Daily Mail 8/9/2021 It is suggested that the new £100,000 asset floor below which people will get help with their care costs will begin straight away. The words in the Daily Mail were, “ But the £100,000 floor will begin straight away”.
I can not find this reported anywhere else. I would understand this since it might reduce social care costs to Local government substantially, but cost recipients of social care funding.
Currently if you have less than £23,250 in savings and own your home you can receive home care provided by the local authority, your home remains protected. Similarly if your spouse lives in your joint home and you have less than £23,250 in savings you can have residential/nursing care funding by the local authority. Your home remains protected for your spouse.
The new £100,000 asset floor does not appear to protect the family home in these situations. Suddenly local authorities might not have to fund many people who have their own home and Local authority charges on property to pay for social care will become more common.
The people who might gain are those , down to their last £100,000 in assets who will pay up to 20% of the value of their assets a year towards their care.
The reality is many families have less chance of holding onto the home when someone needs care.
If the £100,000 asset floor is immediate Local Authorities have got a busy time ahead and many people a big bill.
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