The change to care home funding

The government has set out new plans for the future of adult social care in England.

From October 2023, the government will introduce a new £86,000 cap on the amount anyone in England will need to spend on their personal care over their lifetime. The government states that no individual will pay more than £86,000 on personal care. However, the cap does not cover daily living costs (rent, food, utility bills) for people in care homes, and people will remain responsible for their daily living costs throughout their care journey, including after they reach the cap. Nor does the cap include if you choose to “top up” your care costs by paying the difference towards a more expensive service.

In addition, the upper capital limit, the point at which people become eligible to receive some financial support from their local authority, will rise to £100,000 from the current £23,250. As a result, people with less than £100,000 of chargeable assets will not be required to contribute more than 20% of these assets per year. The lower capital limit, the threshold below which people will not have to pay anything for their care from their assets will increase to £20,000 from £14,250.

Practically speaking, if you have more than £100,000 you will pay the full cost of care from your assets and if you have less than £20,000, you will no longer contribute from your assets and only what you can afford from your income.

If you have assets between £20,000- £100,000, you pay what you can afford from income plus a means-tested ‘tariff’ contribution from assets.

In conclusion, under the new system, if you have less than £100,000 of assets you will be eligible for some state support towards your personal care, but until you reach £20,000 you will still have to contribute something towards the cost of care from your assets.

More and more people are concerned about their home having to be sold and their capital being used to fund care home fees, if the need ever arises.  With care easily costing in excess of £50,000 per annum, capital can depreciate very quickly.

At Private Client Solicitors we are specialist in later life planning. If you are concerned regarding care home funding or would like more information about the proposed changes please feel free to call 0161 509 5020 or email enquiries@privateclientsolicitors.co.uk