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Funding reforms

The proposed cap on lifetime contributions


There has been a buzz around the new care funding proposed reforms, but they may not be what people thought that they were.  There is a proposal that an individual only have to pay for the first £72,000 of their care and after that the Local Authority will pay.  Sounds great but:

The proposals will only apply to England, the cap only relates to “eligible care costs”.  An important part of that statement is that it is “care costs”, which therefore does not include accommodation costs which are have been estimated to be around £12,000 per year.  And what about “eligible costs”, this relates to the rate of fees agreed by the Local Authority, which are notoriously low.

So what does all that really mean?  If someone is in care and their weekly fee is £600 and the Local Authority rate is £500, and for the sake of ease of calculation that accommodation costs are £230 per week, this means: The difference between the actual rate and the Local Authority rate doesn’t count, nor does the accommodation costs.  So:





Only £270 counts towards the cap, which means that this person will have to live in care for approx 5 years and 2 months and the average is around just over 3 years.  Someone would therefore have to live for about double the average amount of time in care for this to become relevant at all.

After it has become relevant, although the £270 would be paid for them, they would still have to pay £330 per week for their care!  And at that time they will have paid £160,000 for the cost of their care over the previous 5 years and 2 months.

There will be some people that benefit from this, but firstly there won’t be many of them and secondly, it won’t save the huge sums of money that people think it will.