Care Cost Reforms
Care Cost Reforms
Parliament this week debated the Second Reading of the Care Reform Bill*. The new bill contains measures that will reform the funding of social care and will cap individual's social care costs.
The cost of care depends greatly on where in the UK you live and the level of care that you need. A place in a residential care home can cost around £30,000 p.a.** but the cost of a care home in Epsom could be as much as £50,000 p.a.** These costs can result in someone’s saving and investments being run down very quickly, often causing considerable anxiety for the individual and their family. With this in mind the proposals are intended to restrict the impact that the requirement to pay for care can have on someone’s pre-care financial situation.
What is being proposed?
The proposals will cap the cost of care to £72,000, but it isn’t as simple as headlined.
There are three key elements of the new reforms which, if approved by Parliament, will be implemented over the next three years. These are:
- A £72,000 cap on eligible care costs - this would apply to costs an individual has to pay to meet their eligible care and support needs in England and would be introduced in 2016.
- An increase in the means-tested thresholds - under the current rules, help with care costs is only available once assets have fallen below £23,250 but, from April 2016, this will be increased to £118,000.
- An interest-bearing universal deferred payment system to ensure that no-one will have to sell their home in their lifetime to pay for residential care will be introduced in April 2015 (the actual details of this option are still being widely speculated in the press).
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