Building Back Better
The 2021 Social Care Reforms
Unsurprisingly, the Social Care reforms that were due to come into force in Octover 2023, have now been delayed until October 2025 at the earliest. As this will be after the next election, the prospect of them proceeding in their present form is slim.
Below, is our summary of what was proposed.
In September 2021, the Government announced reform of the Social Care funding system to be paid for by an additional 1.25% rise in employee and employer National Insurance contributions. We have included a downloadable explanation of the reforms below and much of the detail of the new scheme remains vague. However, the headlines are:
Upper Funding Limit to Rise to £100,000. The assets limit at which your Local Authority will start contributing towards your care costs will rise from its present rate of £23,250 to £100,000 in October 2023. Although unclear, we would expect the new limit to apply to those already funding care in October 2023, rather than those moving into care for the first time from that date.
A Cap on Care Costs of £86,000. Money spent on care will be recorded in a care account in your name, up to the level that the Government assesses that care can be bought for in your locality. You will remain responsible for all ‘hotel’ costs (food and accommodation) and any care costs above the Government limit. We expect that only care costs incurred from October 2023 onwards will be included in your account.
Local Authority Purchasing. On request, local authorities will offer their purchasing power to arrange care for self-funding residents at a lower cost than would be available on the open market.
These are significant changes to the present care system and may improve financial outcomes for care home residents, although we doubt that it will prevent the need to sell property to fund care.
Until the Government announces the level of its ‘fair price for care’ and its calculation of ‘hotel’ costs, it is impossible to work out how the new reforms may affect you. We will keep you informed, and we expect the rise in the assets limit to £100,000 to be the most significant change that will offer the greatest benefit.
Our initial calculations suggest that it will take some time for most people to reach the £86,000 care cap, and once they do, they will receive a contribution towards their care costs, rather than the entire fee at their chosen care home.