What the new care proposals mean for you
The government recently approved new social care funding plans which could see some people able to keep more of their assets despite paying for care. However, the new rules are complex, and many will end up paying more than they expect.
Here are the answers to some of the most frequently-asked questions about the plans.
Q. Who will the new funding rules apply to, and when will they come into play?
A.The new social care funding rules will apply from October 2023, to anyone who needs adult social care, either in a residential care facility or at home. If you enter care before this date, you will continue under the current rules, even if you continue to need care after this date.
Q. How will the rules differ from this date?
A. At present, anyone in England with assets over £23,250 pays for their own care home place – that’s around half of the people in care homes. The thresholds are different elsewhere in the UK -£50,000 in Wales, and £28,750 in Scotland.
If you need care because of complex medical care needs due to disability, accident or a major illness you may be eligible for Continuing Care funding to pay part of the bill, while if you need nursing care you may get some funding for this too.
You will continue to pay until your assets fall beneath £23,240, and after that the NHS will pick up some of the bill, though you may have to stay in a less expensive care home at that point.
Under the new rules, no-one should have to pay any more than £86,000 in care costs. Those with assets under £100,000 will be eligible for some state support.
Q. Are there any extra costs I should budget for?
A. An £86,000 cap might sound generous, but with care funding, the devil is often in the detail. This cap only includes care costs, which are part of the price you pay for a care home place. However, you also pay for accommodation, food and bills, and these are not included in the cap. The policy suggests that these will be set nationwide at a cost of £200 a week, so even when you reach the £86,000 cap you will pay this. You may also pay ‘top up costs’, which the government defines as “additional payments for a preferred choice of accommodation or care arrangement, for example, to secure a premium room or furnishings”1. These top ups do not count towards the cap and will still be payable once it has been reached.
Q. Will I have to sell my home to pay for care?
A. This depends, and has become a contentious subject. If one member of a couple goes into care and the other remains in the house, the house is not counted as an asset. If the house is empty and you go into care, then it becomes part of the assets assessed to decide whether you should pay for your own care.
So if you have not yet reached the £86,000 cap and you need money that is not more readily available to pay for care, or you need money to pay for the £200 a week living costs, the house may have to be sold, or equity released from it, to pay for care.
Q. What should I do in light of the care changes?
A. Even if you already have a financial plan in place that includes some provision for the cost of care, it is worth revisiting it considering the changes. A financial adviser will be able to talk to you about how to arrange your finances so that you have money available for care, as well as arranging it so you can leave a legacy if possible.