Social care reforms in England – how will they work in practice?

Social care supports those with care needs (including the elderly or those with an illness or disability) to live in their own home, residential care homes, as well as in supported living and day centres. On 7 September 2021 Boris Johnson announced the governments long awaited reform of adult social care funding. This includes a cap of £86,000 on the amount someone will have to pay towards the cost of their care during their lifetime, with taxpayers funding costs on top of this. It also introduces changes to the financial eligibility criteria, which determine how much people need to contribute towards their care costs. In theory, this should mean that more people are entitled to state funded assistance with care costs. Johnson said the cap would “(protect) people against the catastrophic fear of losing everything to pay for the cost of their care”. It is anticipated that the plan will provide an extra £5.4 billion for adult social care over the next three years.  The changes will only apply in England, since Scotland, Wales and Northern Ireland have separate arrangements for social care.

What will the reforms mean in practice for those who require care?

What is included in the cap of £86,000?

 Johnson said that “from October 2023 no one starting care will pay more than £86,000 over their lifetime”. Although not mentioned in published plan, the government confirmed to BBC News on 8 September 2021 that the £86,000 cap will relate only to the cost associated with care i.e., care required for daily tasks such as washing, dressing and eating, whether care is provided in a care home or in someone’s own home.

The cap will therefore not apply to accommodation related costs of care, which include food, utility bills and the cost of the accommodation itself. These costs would need to be paid if someone was receiving care in their own home in any event.

Are all care costs covered by the cap?

 No. It will only cover the costs required to meet care and support needs, as assessed by the local authority. This means that it will be necessary for those requiring care and support (or their loved ones) to ask the local authority to undertake a Care Act assessment. This will determine how much social care they are entitled to and what the local authority will fund.  These assessments can be open to challenge in certain circumstances.

Self-funding

 Currently, if people want to spend more than what the local authority says is necessary, they can pay the top up for care through self-funding. The government has said that they intend to legislate to stop the practice where care funders charge self-funders much more than local authorities for the same service.

 When is the cap due to come into force?

 October 2023

What changes are proposed to the means test?

 Currently, if someone has chargeable capital of over £23,250, they are required to fully fund their care. Their home will not be taken into account when assessing their chargeable capital if they live in their home or move into a care home on a temporary basis, although it can be taken into account if they move into a care home permanently. There are exceptions to this, such as a partner continuing to live in the property.  If their capital is below £14,250, the local authority currently pays for the cost of the care, save for a contribution being made out of their income, potentially leaving them with just the weekly personal expenses allowance of £24.90. Those who have savings between £14,250 and £23,250 are charged £1 in ‘tariff income’ per week for every £250 in capital they have between the lower and upper thresholds.

Under the new plan, the lower capital limit will be increased from £14,250 to £20,000, so that those with capital under £20,000 will no longer be required to contribute to their care costs out of their capital. The upper limit will be increased to £100,000, potentially making more people eligible for state funding with care costs. Those with between £20,000 and £100,000 in chargeable assets will contribute from their income to their care and also, if required, from their savings up to a limit of 20% of their chargeable assets per year.

The government said that it would also lift, from April 2022, the freeze on the personal expenses allowance, and the minimum income guarantee for home care users, so that they rise with inflation.

Are the proposals to cap care costs new?

 No.  It was recommended by the Dilnot Commission, which was set up by the coalition government in 2011. At the time, the cap proposed was £72,000. The cost of living and inflation has increased since then.

Will the cap apply retrospectively?

 No. It is understood that care costs incurred prior to October 2023 will not count towards the £86,000 cap.

How will the reforms be funded?

 From April 2022 a health and social care levy will be introduced through National Insurance being increased by 1.25 %   for everyone who currently pay National Insurance, ie people who work and are below pension age. A similar increase levy will apply to share dividend income. Employers will also have to pay an increase of 1.25% in National Insurance.

From April 2023, the levy will become a separate tax on earned income and so will also be payable by pensioners who work and receive an income.

Hospital discharge funding

 The government has also pledged £478m to support ‘enhanced hospital discharge’.  This involves a system of ‘discharge to assess’, in which people who leave hospital with potential care and support needs are assessed after discharge and then provided with short-term reablement support, where necessary.  The system is designed to speed up hospital discharges and to promote more person-centred assessments, in the comfort of homes, rather than on a hospital ward.

 Nicola Gunn is a Partner in the Court of Protection and Family departments. If you require any assistance with care assessments or funding care, please contact Nicola on 020 7940 4057 or nicola.gunn@anthonygold.co.uk.

* Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*