The government’s planned care fee cap has been postponed for two years. The cap was due to come into effect in October 2023, limiting the amount an individual would have to pay for personal care to £86,000.
Currently, there is no cap on the amount someone can pay for social care during their lifetime, meaning for many families, all their assets are consumed by the cost of care.
What is the Dilnot Report?
In 2011, the Dilnot Commission, created by the coalition government, produced a report on how to protect the public from the high costs of long-term social care.
The report, titled ‘Fairer care funding’, recommended implementing a cap between £25,000 and £50,000 on the contributions any individual makes towards the cost of their personal care, excluding living costs, with a suggested cap of £35,000.
It also advised increasing the upper threshold on the means tested state support from the current £23,500 to £100,000 of assets, and raising the lower limit from £14,250 to £20,000 before someone would be expected to contribute towards their care costs.
Those in residential care should make a standard contribution of £7,000 to £10,000 per year for their general living costs, according to the Commission.
With a limit on the total cost of social care, the Commission expected a market to develop for insurance products to cover the cost of contributions.
As a result, In 2012 the government published a Progress report on social care funding reform, and then in 2014 the Care Act was announced, introducing a planned care fee cap of £72,000.
What happened to the £72,000 care fee cap?
The Dilnot Report was legislated for in the Care Act 2014, but never implemented, and was eventually abandoned in 2017, under Theresa May, after having been deferred to 2020. The cap has now been revived; it was initially due to come into effect in October 2023, but has been pushed back to October 2025.
What does the new care fee cap cover?
The new suggested cap is £86,000, likely due to inflation, and is now slated to come into effect in October 2025. The asset threshold will also increase to £100,000, so anyone with less than six figures in assets will receive some financial support.
The remaining cost of social care will be government funded, driven by an increase in National Insurance and the new ‘Health and Social Care levy’.
How much will I be expected to pay for social care?
Unfortunately, the cap only covers personal care, which includes any nursing and assistance they need, whether that’s washing and dressing, feeding themselves or managing health problems.
Any accommodation, utilities, etc. will not be funded and will need to be paid for by the individual. The cost of living in a care home is at least £200 per week, or £10,400 per year, and this is not included in the cap.
It’s important to plan ahead for your future care needs when considering your financial affairs; the new cap will benefit many people, but there may still be high costs to pay for long-term care.
Specialist Medical Accountants