The new social care reforms
With the fantastic new announcement that people will not have to pay more than £86,000 for their care, what does it all really mean?
There has been discussions for years about the crisis in social care and/or the NHS, but the pandemic made a difficult situation far worse, the increase in national insurance contributions will help, if the money is directed to the places that need it. This is the good news, even though it’s not such great news, as it means people pay more taxes, which no-one likes, however it is necessary.
The cap of £86,000 on care costs, covers only “care” and not “hotel” costs, which is food and accommodation. The government has indicated that people will not pay more than £12,000 per year in hotel costs, but with residential care costing about £35,000 and nursing care costing £50,000, this still leaves £23,000 – £38,000 of care costs a year that will need to be paid. But not all of these costs will contribute towards the cap, as the government has also said that they will have their own cost limits, for care, so they might count only £30,000 of the £38,000 that is being paid in care. Which means that of the £50,000 someone is paying, perhaps only £30,000 will count towards the cap. Therefore by the time somebody has racked up £86,000 worth of “care costs”, they have probably spent IRO £150,000 on care in total. The good news is that care at home will also count, but again, not necessarily the rate that is being paid, but the rate that the government think the care is worth.
In reality, there are few people who spend £150,000 of their own money on total care (care and accommodation costs), to be able to benefit from the government’s cap. Whilst there are plenty of cases of care costing this much, it is often funded by the NHS or local authority in any event and not from people’s own resources. This announcement makes a good headline and makes people think that they will not have to sell the family home to pay for care, which is a hugely emotive subject, but unless the family has significant cash assets as well, they will probably end up selling the house to pay the £86,000 of care costs.
There are some positives, but the government will need to do a lot more to make significant improvement in social care and as we all get older, this should be increasingly important to all of us.