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What does the new cap on care costs mean to me?

12 May 2022 | Heledd Wyn

The government recently announced a cap of £86,000 per person for long-term care fees, but this change could be detrimental to those less wealthy and in poorer regions. Heledd Wyn explains the new cap on care costs and its impact.  

What are the government’s changes?

Significant reforms to the social-care system were voted last year by the government and proposed a cap of £86,000 on the lifetime care costs that people face. The government also proposed amending the Care Act 2014 so people receiving support from the local authority to help meet their care costs would no longer count towards the cap.

The House of Commons overturned this twice, and on 26th April, the government defeated the final attempt by opposition peers to prevent the amendment from going ahead.

Following a parliamentary battle, the government plans to introduce an £86,000 cap on the amount anyone in England will have to spend on their personal care over their lifetime. The government has estimated that the change will save £900m a year.

Regardless of an individual’s age or income, the cap will apply. The cap will only apply to money spent on an individual’s care needs, and expenses for day-to-day living are not included.

The cap will not apply retroactively, meaning that costs incurred before October 2023 will not be included in the cap.

These changes are intended to reduce the extensive financial burden that individuals and their families endure when paying for the essential care and support individuals need throughout their lifetime.

Cap on care costs detrimental to those with low wealth and in poorer regions

However, research by think-tanks the Health Foundation and the Institute of Fiscal Studies found that this would leave people with lower levels of wealth and those living in poorer areas with significantly less protection against ‘catastrophic’ care costs, which is contrary to the policy’s stated purpose.

This amendment, according to the Health Foundation and the King’s Fund, significantly decreases the benefits of the improvements for people with lower levels of wealth.

They argue the amendment would have the biggest impact on people in Yorkshire, the Midlands and the North East of England witnessing a large decrease in their protection against high care costs.

The change in cap cost also goes against the blueprint for the cap set out by Dilnot Commission in its 2011 report. Which stated that for people receiving means-tested assistance, the full costs to the local authority would be counted. This implied that they would reach the cap faster than under the government’s plan.

Outcome of the parliamentary battle

In November the Government announced it would look at modifying the Care Act 2014 to exempt any money paid by local authorities towards an individual’s eligible care needs from the cap. Following this, a clause was added to the Health and Care Bill at the report stage in the Commons.

The proposed Bill was disputed and the main subject of debate between the Commons and the Lords. However, the House of Commons overturned this both times, and on 26th April, the government overcame a final attempt by opposition peers to prevent the change from going through.

Having been agreed by both Houses of Parliament, the Health and Care Bill will now become law on October 2023.

Furthermore, it also includes provisions to reintroduce performance evaluation of council adults’ social services and remove the system that allows councils to be fined for delayed hospital discharges that they are deemed responsible for.

This will now be scrapped to support the government’s implementation of the discharge-to-assess approach, in which people are assessed for any post-hospital care and support needs.

Specialist Long-Term & Elderly Care Solicitors

Planning for future care is important, even if the need is not immediate or even on the horizon. Speaking to a care funding expert as early as possible can help you put plans in place so that you have peace of mind, whatever the future holds. To discuss your situation or questions with Heledd Wyn and the care team at GL Law, please call 0117 906 9400 or email Alternatively, please complete our contact form.  

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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