In September 2021, the government finally confirmed that the long-awaited cap on care costs, which was provided for in the Care Act 2014, was finally going to be introduced. Further details have just been released and a brief analysis of how this will work is set out below.
The basic principle of the cap is that adults with care needs should pay a maximum amount towards their care. Once an adult reaches that cap, the local authority should then take over the adult’s care costs.
The cap will be set at £86,000 irrespective of age or income. This is the maximum lifetime contribution that an adult will need to pay out of their own assets towards the cost of meeting their care needs.
It is not simply a case of reaching the cap and then getting care for free for the rest of your life. As you can imagine, the arrangements are more complicated than that.
From October 2023, every adult in England who requires care and support will have an assessment of their eligible care needs carried out by their local authority. Once those have been assessed and agreed, a personal budget to meet those needs will be set by the local authority.
The local authority then keeps an account for each such adult showing the contributions that adult has made towards those eligible needs. Once the adult has hit the £86,000 cap, the local authority steps in to meet the cost of the assessed eligible needs. Only the contributions made by the individual will be counted towards the cap.
As is currently the case, in an adult with limited assets will be entitled to financial assistance from the local authority towards the eligible care needs.
Self-funders with more than £100,000 worth of assets will be expected to meet their own care costs entirely up to the limit of the cap.
Once the value of a person’s assets falls below £100,000, or if the person needing care has less than £100,000 worth of assets, the local authority will start to provide financial help to meet the needs of the person requiring care, subject to means testing. Once the person’s assets are less than £20,000, they do not need to make a contribution from their assets – but will still be required to make payments out of their income.
This means testing and financial assistance is similar to the current system, which provides some funding once your assets drop below £23,250 and meets the full costs if your assets drop below £14,250.
Like the current system, you will still be expected to contribute towards your care from your income, unless you have met the care cap.
However, there are some things to be aware of:
- You will be responsible for meeting the costs of any non-eligible care needs. The cost of expenditure on those will not be taken into account in the cap on care costs.
- The budget for your eligible needs will be based on what authority pays for those services, which is usually less than self-funders pay. Only the costs budgeted will be taken into account in calculating your contribution towards the cap. You could decide to ‘top up’ the amount the local authority would pay in order to meet your choice of care provision. For example, the local authority may provide a budget of £15 per hour for personal care but choose a more expensive service at £20 per hour to meet your needs. For the purpose of the cap, only £15 per hour will be taken into account. You could end up spending more than £86,000 in meeting your needs and still not reach the cap.
- The system is going to be difficult for local authorities to administer. They will have to keep track of the care account for every self-funder and their assessed eligible needs up to date. There could be over 300,000 more care users ‘in the system’.
- Because only those eligible needs will be included in the budget, there could be a difference of opinion on what the local authority considers are eligible needs, and what the service user considers their eligible needs are. This may lead to lengthy arguments and tensions.
- Any top up fees you pay will still need to be met by you once you have reached the cap.
- Eligible needs exclude the daily living costs or ‘hotel costs’ for food and accommodation. Individuals will be expected to meet those costs themselves, although the notional charge for those is expected to be limited to £200 per week.
- You will still be expected to pay daily living costs once you have hit the cap, subject to financial assessment.
- Whilst someone remains living at home, the value of their home is excluded from the means test and someone living at home may want to remain living at home with a package of care in order to meet the care cap before going into residential care – to avoid having to sell their home to pay for care.
- Any care fees you have paid before October 2023 will not count towards the cap.
How can we help ?
This is complex and far reaching and the Wollens’ Care and Capacity team can guide you through this area of law, helping you to understand and challenge any decisions on eligible needs or your personal budget as well as explaining the future implications for you.