The Government is introducing new measures to give you peace of mind that you will get the care you need, without facing unlimited costs.
The most financial support will go to those who need it most. And your home and savings will be better protected if you develop the most complex or long term care needs.
What changes are being made?
People pay for their care costs now, and will continue to do so in the future. However the new measures mean you will get the care you need and that you and your home will be protected from huge costs if you develop very complex care needs.
These measures are based on the recommendations of the Dilnot Commission, an independent panel that was set up to look at the fairest and most sustainable way to fund social care.
The new measures include, from April 2017:
- A cap on care costs, which gives everyone the reassurance that they will have a level of protection, if they have the most serious needs and incur very high care costs.
- If someone is assessed by their local authority as having eligible care needs, they will be told how much it will cost the local authority to meet those needs with local services. These costs count towards their cap. So, however great a person’s costs become, once they have reached the cap the state will step in and provide financial support.
- Due to the economic circumstances, we are introducing a cap that is equivalent to around £61,000 in 2010/11 prices – slightly above the £25,000-£50,000 range originally recommended by Andrew Dilnot. This is equivalent to £75,000 in 2017/18 prices. We expect up to 16% of older people to face costs of £75,000 or more.
- People of working age who develop care needs before retirement age will benefit from a cap that’s lower than £75,000. People who have care needs before they turn 18 will effectively have their cap set at zero.
- New financial protection for those with modest wealth. People with the least will get the most support.
- Currently only those with assets of less than £23,250 get help with paying for their care costs. Our changes will mean that those with property value and savings of £100,000 (in 2010/11 prices) or less will start to receive financial support, with the Government paying a proportion of their residential care costs on a sliding scale. £100,000 was the amount recommended by Andrew Dilnot, and is equivalent to around £123,000 in 2017/18 prices. The most financial support will go to those with the greatest care needs and the least in savings or home value, and the poorest people will continue to have the majority of their care costs paid.
And from April 2015:
- No-one will have to sell their home in their lifetime to pay for residential care. If people cannot afford their fees without selling their home, they will have the right to defer paying during their lifetime.
- People will have clearer entitlements. A national minimum eligibility will make access to care more consistent around the country. Assessments for carers will be simplified and for the first time there will a duty on councils to meet carers’ eligible needs for support.
The Government will legislate for these proposals. Subject to the passage of legislation, the changes above will take effect from April 2017 and will provide people with a new legal right to financial protection from very high care costs , from the state, which has not existed previously. The 2017 timing will ensure that these changes are affordable and sustainable for the long term.
Why do we need to change how care is paid for?
Currently, there is little financial protection for the cost of care in older age. If you are frail, have a physical disability or develop a condition like dementia, the state only steps in to pay the cost of care if you have less than £23,250 in assets or if you cannot pay for your costs from an income.
Care needs are unpredictable. A quarter of us may need to spend very little or nothing at all, but 1 in 10 of us will have more serious care needs and face costs in excess of £100,000.
Currently, people unfairly face having to lose almost everything they’ve worked hard and budgeted for, to pay for care. While only a small proportion of us ever experience catastrophic costs, in the worst cases people have had to sell their home or exhaust their life savings to get the care they need.
This ‘care lottery’ creates uncertainty for us all, and distress for the worst affected, who also tend to be the most vulnerable and frail because of the nature of their condition. This needs to change.
What will the benefits be?
The new measures will mean you get the long-term care and support you need without facing financial ruin. People will benefit wherever they receive care – be it in a care home, or their own home. The greatest financial support will go to those with the greatest care needs and the least in savings or home value. Those with the least of all will continue to have all their costs paid for.
You will be more in control, and will be more easily able to plan and prepare for the care and support you might need.
An end to decades of uncertainty about how we pay for care will mean the financial services sector will be able to create a greater range of financial products, that will give people more choice about how they plan to meet their care costs.
See a graph and flowchart explaining how the reformed care and support funding system will work and how it will affect what people pay towards their care costs.
Find out more about how the care and support funding reforms will work and read the answers to some frequently asked questions.