Government announces care costs cap

This blog was contributed by Caroline Abrahams, Director of External Affairs, for Age UK. 

Last year’s White Paper and draft Bill make these encouraging times for social care, for decades a Cinderella service. What has been so obviously lacking though is the funding for a better system, so today’s announcement about the implementation of ‘Dilnot’ is a welcome step forward.

Unfortunately, implementation has to wait until April 2017, so very few older people living in a care home now will benefit, but at least some of those who come after them will: the Government estimates that 1 in 6 older people who need care will gain, but by just how much and over what timescale is hard to tell without detailed modelling which the Government has not (yet) released.

Means-test threshold change 

The most important change is the fourfold increase in the upper limit of the means-test for residential care, to £123,000. More older people will benefit from this than from any of the other announcements.440px_older_carers_hands

In contrast, the level of the cap is disappointing: £75,000 may be too high to create an insurance market, or to safeguard every family home whose owner has to enter care from sale – though the Government will no doubt respond that its ‘deferred payments scheme’ means that at least this should not be necessary until after their death.

The capping of ‘hotel costs’ at £12,000 is welcome, but it means that care will be by no means free even after these reforms come in – but that was always going to be the case.

Still, the Dilnot approach is in place and Age UK will campaign hard for a more generous interpretation by 2017. A high cap is also far better than no cap at all because it ends the risk of unlimited care costs: one woman who contacted Age UK recently had spent £220,000 on care and counting.

Many older people will feel less anxious about the future as a result. But today’s announcements will not resolve the crisis in care funding.

To do that the Government must substantially increase and ring-fence the money it gives councils for social care, to improve its quality and extend its reach. Only then will Cinderella at last be able to go to the ball.

Read more about this announcement and what it could mean for you

Find out more about Age UK’s Care in Crisis campaign 

7 responses to “Government announces care costs cap

  1. Food and accomodation costs are outside the cap. These will be initially themselves be capped at £12,000 a year. So take someone who was in a home for 10 years then the overall cost will not be a capped 75,000 but will in fact be nearer £200,000. In other words, someone with 50,000 lifetime savings and a house worth say 150,000 will have nothing left after 10 years if I read this right.
    And if the accomodation costs are outside the means test for when the cost of care starts then does this mean that the person in the home will start paying immediately irrespective of how much money they have ?

  2. This rules out anyone who owns a home as a beneficiary as most homes are worth more than £123,000. It is most likely that the home will have to be sold because there are not going to be many people who have £75,000 in the bank. And in any case the £75,000 does not cover accommodation and food in a residential home. Apparently only 10% of pensioners might benefit and the system is complicated. Inheritance tax is fixed at an unrealistic rate contrary to government pledges. The capping is double that recommended by Dilnot. So this helps how? Another ill-thought-out goverment fiasco. Fortunately, like so many of the government’s proposals, they don’t come into play until after the next elections, so may never happen.

  3. Hi there,

    The cap announced does not include ‘hotel costs’, so people living in a care home will still need to pay for their day to day living costs like food and accommodation.

    The Dilnot Commission suggested this because they wanted to ensure that people receiving care in their own home (who would still need to pay for their housing and bills) and someone moving into a care home were paying similar amounts.

    The cap on hotel costs is meant to be set at a level that could be paid for out of an average pension., but it’s correct to say that this does mean, even after someone has reached the cap, they will still need to pay these charges and so care could still cost more overall.

    However if someone is on a low income or does not have savings we expect there to be means tested support available as there is now.

    Hope that clarifies some of the points – thanks :)

  4. How are the Dilnot cap and the government cap calculated? Why is there such disparity? I have a nasty suspicion that the government is reckoning on total care charges ie. for all and then sharing it out among those who do have assets. Could anyone enlighten me?

  5. Pingback: Does the cap fit? Social care questions contribution limit

  6. I think you could be right there Mrs VM.

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