On the 7th of September the Government laid out its plans to improve the lifetime cap on the amount anyone will spend on their care, this change comes alongside a change to the means test for local authority support, the government said. This reform has been wrestled with and long debated by successive governments and government commissions, the most notable of which was the 2011 Dilnot Commission.
What it means
From October 2023 there will be a new cap of £86,000 introduced to the amount an individual will contribute towards the cost of their personal care. This covers the cost of personal care over an individuals lifetime, the “upper capital limit” (UCL) has also been increased from £23,250 to £100,000, this means that people will receive support from the Government earlier and that those with less than £100,000 of chargeable assets will never contribute more than 20% of these assets per year.
Daily Living Costs (DLCs) however will not be covered, these include spending on food for example, also referred to as “hotel and accommodation” costs, the cap covers personal care costs only. Throughout their care journey therefore people remain responsible for their “daily living costs”, which will be set at a national level of £200/week.
Assets | What you Pay |
Above the upper capital limit (£100,000 from October 2023) | Full cost – you are considered a “self-funder” |
Between the capital limits | What you can afford from income plus a means-tested ‘tariff’ contribution from assets. The tariff is calculated as follows: for every £250 of capital between the lower and upper limit, an income of £1 a week is assumed, and this will be payable towards the cost of your care |
Below the lower capital limit (£20,000 from October 2023) | You no longer contribute from your assets and only what you can afford from your income. |
Source: https://www.gov.uk/government/publications/build-back-better-our-plan-for-health-and-social-care | |
The introduction of these changes is not without controversy and even this month the Lords have rejected the Bill sending it back to Government.
A key issue is fairness, the Bill means that everyone pays the same from their own pocket, but this is not means-tested. The intention is to ensure that no one experiences “catastrophic care costs”, however, because it only counts your personal contribution to care costs not the accumulated cost of care (regardless of who incurred the cost) over your lifetime for some this could mean that 70% of their life savings will be spent on care costs and could mean they have to sell their home to cover costs. For those individuals, this could not unreasonably be argued to still be “catastrophic” Source - www.kingsfund.org.uk/publications
This challenging issue will continue to be debated ahead of the planned implementation in October 2023, it is likely to be further challenged by the current increased costs of living and inflation experienced in the United Kingdom.