The short answer is no. You still have to think about how social care costs and care home fees will impact on you and your family.
The government announced in the autumn of 2021 that it intended to “fix” the social care crisis by raising National Insurance rates for employers and employees and using the money to fund social care. The idea was that it would remove the very substantial burden on older people to sell their homes and assets to fund care home and other social care costs.
Unfortunately if you delve behind the headlines, the policy, as announced, does not mean that no one will ever have to pay their own care fees or sell their house.
The policy envisages a lifetime cap of £86,000 on the cost of personal care. In other words you should not have to spend more than £86,000 in your lifetime on personal care.
However it does not come into effect until October 2023 and no funds expended by the individual in need of care prior to then will be taken into account for the cap. That means that until that date people with a certain level of assets, which is quite modest, will still need to fund their own care. It is only costs incurred after that date which will count towards the cap.
It’s also important to appreciate that the cap will be on personal care costs and does not include living costs. Care homes fees will typically be made up of the costs of employing carers and providing care, plus the costs of living which would include things like accommodation and food. Those living costs will still have to be met by people out of their own resources. It may be that pensions and savings would cover it but possibly not.
Turning to the £86,000 cap, while that is a lot lower than the potential hundreds of thousands that people may currently incur in care costs, it is still a lot of money and unless you have it in savings or investments, say, there may still be a need to sell your house to cover it if your house is your main asset. It is possible to agree to defer the sale of a house with the local authority who could offer a deferred payment agreement but there would still be a charge on your house via that route.
Another issue to be aware of is that under the new policy the local authority would determine your care needs and how much they would contribute to your care. If you are receiving care at a higher cost than the local authority deem necessary and prepared to pay for, then you may have to top up the difference, regardless of the cap. So, for example, if you chose to live in a more expensive care home the local authority may not pick up the full personal care cost.
All of this means that there is still a very real possibility that even after October 2023 people will still need to plan their finances carefully to deal with these issues.
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