Tackling the future funding of social care

Age UK has responded to a Department of Health consultation on the future funding of social care. This marks the latest stage in the long march to reform how we pay for care. The ‘Dilnot’ Commission on long term care funding recommended a new system whereby the amount that individuals would be expected to pay towards their care needs would be capped. The government has announced that it will implement a modified version of these recommendations. However there are still many unanswered questions about the new system and concern about its complexity.

The proposals are based on a new national system of eligibility for local authority care. The only spending by an individual that will count towards the 440px_older_carers_handscap is that required to meet needs which fall within these criteria – currently set at ‘substantial’ . If the criteria are too restrictive people might have spent large amounts before their outlay even starts to count towards the cap. Age UK has therefore argued that eligibility for local authority care should include people with what would currently be defined as moderate needs.

Expenditure towards the spending cap should, in Age UK’s view, be counted as being what the person actually spends. The Government proposes to base it on what the local authority would pay which means it will take much longer to reach the cap, since local authorities can usually purchase care at a lower rate than would be possible for an individual. If the current system of residential care provision is anything to go by it is also likely that local authorities will calculate the cost of care based on a ‘usual rate’ which bears little resemblance to actual market conditions.

The level of assets that people can have, and still get some support from the local authority before reaching the spending cap, will be dramatically increased to £118,500 for people who move into a residential care home and who own a previous home (see Age UK’s factsheet 10 for a detailed explanation of the current system). While very welcome, this is not as generous as it looks. People who have assets are assumed to be able to generate income from their capital at £1 for every £250 of assets, that is at 21% a year. This means if you only have £118,500 and would expect to start to qualify for a local authority financial contribution you would still be assumed to have income of £24,648 a year on top of any other income you might have. You would therefore still be unlikely to qualify for financial help. Age UK has recommended that the assumed rate of income from capital should be halved.

Having reached the cap people should receive free care and support, but this excludes ‘hotel costs’ for people in care homes, which it is proposed should be set at £12,000 per year. Age UK has argued for a lower figure based on Pension Guarantee Credit plus base Attendance Allowance.

The other major part of the new system will be a new national ‘deferred payment’ scheme. People will only have to pay for the cost of residential care after they die so will not have to sell their homes in their lifetime. There has already been controversy over the proposal to means-test the scheme to limit it to people with non-housing assets below £23,250, but there are also unanswered questions over how much people can defer. Age UK’s view is that everyone moving into residential care should have access to the scheme and that the deferred amount should be sufficient to ensure that people are not limited to the cheapest homes, that they have enough for day to day expenses, and that they can maintain their property

Consultation which Age UK undertook with older people concluded that the proposals looked better than the current arrangements but were not necessarily fairer. Tight eligibility criteria and a higher funding cap than that recommended by Dilnot mean that less people will be helped than expected.  Age UK continues to argue that these and other problems with the system can only be resolved with adequate funding.

Care in Crisis is Age UK’s campaign to ensure that every older person is able to get the care they need. Find out more about the campaign.  

Read Age UK’s full response to the Department of Health consultation on the future funding of social care

One thought on “Tackling the future funding of social care”

  1. Already paying 8% on a deferred loan for my late Mother’s care fees so owe £25k to Hampshire County Council secured against her flat – which I cant sell as its a retirement property and no market for them -so new proposals for 4% for deferred loans looks good to me!
    Also trying to claim take Primary Care trust for her fees (and then we could pay off the loan!) as she had acute Parkinson’s disease PCT tell me today that claim may be assessed next year’ perhaps’ – this is disgraceful and needs someone to look into why it is taking so long – perhaps they think we will all be dead ourselves by then???
    Absolute scandal – as a pensioner myself ,think will sell my home spend the money and let the state sort me out – no point in saving at all!

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