Social Care Reforms
The Government announced last week that, from October 2023, there will be changes made to the Social Care system. These changes will affect how much you will need to pay towards your care in the future. These changes are currently proceeding through Parliament.
The current average cost in England of a stay in a residential home is £600 per week, with nursing care costing on average £800 per week.
What is the current system?
Currently, if the value of your capital assets is above £23,250 then your care fees will need to be fully self-funded, and you will not receive any financial support from the Local Authority, subject to certain limited disregarded items in certain circumstances.
If the value of your capital assets are between, £14,250 and £23,250, then you will get some financial help from the Local Authority.
If your assets are less than £14,250, then you must continue paying from your income, subject to a ‘protected’ lower amount, but you will not need to contribute from your capital. The Local Authority will pay the remainder.
Your Local Authority will do a ‘means test’ to work out how much you will need to contribute from your capital towards the cost of your care.
What are the new changes?
MPs voted this week by a sizeable majority to approve the following changes to the Social Care system.
- If the value of your capital assets is above £100,000 then you will need to fully self-fund your care.
- If the value of your capital assets is between £20,000 and £100,000, then you will need to contribute to a percentage of the fees, based on your income and savings, but you can request financial support from the Local Authority on a means-tested basis.
- If the value of your capital assets is below £20,000 then you will not have to use your capital to pay for your care, although you will still need to contribute from your income, subject to a ‘protected’ lower amount.
The Government also announced that people will not be made to pay more than £86,000 (a lifetime cumulative amount) in care costs. Whilst, on the face of it, this change may be welcomed by many who worry about spending their life savings on care fees, and needing to sell their homes to fund their care costs, this cap does not include the costs of accommodation and food – only personal care. However, care costs paid whilst at home will count towards this total lifetime amount.
This change will only benefit those starting care from October 2023. If you are already paying for your care, then you will not benefit from the new changes.
Can I protect my savings for my family?
There is no definitive answer to this question. It is important to consider your aims and objectives, and your personal and family circumstances. We can advise and support you about the payment of care fees and the relevant disregards. Learn more about this and the matters mentioned above, or to review any existing steps or structures you may have taken or tried to put in place in this area, by getting in touch with our private client team.
These changes will not affect the Deprivation of Capital Rules or the Continuing Healthcare Funding entitlement to Nursing Care (not residential costs or food) for those who are assessed as needing nursing care which is a NHS responsibility.
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