Proposed Social Care Reform

Back in September 2021, the news was dominated by the Prime Minister setting out the Government’s plans for social care in England and how they will be funded.

The proposed changes announced by Boris Johnson affect those entering care from October 2023 and these are the headline points:

If you live in your own home, all of your social care will be funded by taxpayers if you have less than £20,000 in assets — excluding the value of your home. Partial funding is available if you have assets worth up to £100,000.

As is the case with current means testing, once you have moved in to a care home, the value of your property will be included in your assets. In this scenario, some people may need to sell their home to fund their care if they have a low income.

There will be an overall cap on the amount any individual has to pay for care of £86,000. The figure only covers personal care costs, not residential (aka ‘hotel’ costs) which can be extremely high!

The Care Act 2014, which is the framework to be used to introduce the reforms announced, fixed the personal care cost calculation using the costs that would be assessed and paid by a local authority, not the (usually much higher) self-funding costs levied by homes.

The Government’s main document on its changes says that it will use legislation in the Act to ‘ensure that self-funders are able to ask their Local Authority to arrange their care for them so that they can find better value care’. Precisely what effect that will have in practice is unclear.

It seems the reality of the proposed changes mean that unfortunately for many their assets are still at risk from being swallowed by care costs.

To discuss how we can help you protect your assets, book your complimentary financial planning review with one of our advisers, call 0117 3636 212 or email office@haroldstephens.co.uk.