The subject of long-term care has been one which politicians of all parties have regularly kicked into the long grass, primarily because of the potential costs of changing the existing system.
There are different rules for the four different parts of the UK, with Scotland’s currently the most generous and England’s the most costly because of the size of its population
The English system
The current rules for England mean that anybody with capital of more than £23,250 must meet all their own care fees, although they may be entitled to a £112 a week payment towards nursing care costs.
A review set up by the last government in 2010 produced a recommendation of a cap on personally-funded lifetime care costs and a much higher means-testing limit.
After some delay, the government broadly followed the report’s suggestions, with new measures under the Care Act 2014 to take effect in 2015 and 2016. The most significant, due from April next year, were a lifetime personal cost cap of £72,000 and a new upper means test limit of £118,000.
A Friday in July…
In mid-July the Minister of State for Community and Social Care wrote to the Chair of the Local Government Association to say that both new limits would be put on hold until 2020.
In his letter the Minister said “A time of consolidation is not the right moment to be implementing expensive new commitments such as this”, even though his party’s manifesto had stated “we will cap charges for residential social care from April 2016”. Several experts saw the move as a prelude to scrapping the cap and higher limit entirely in a couple of years’ time.
It cannot have escaped the minister’s attention that the National Living Wage, announced in the Summer Budget, would lead to a sharp rise in care home costs.
This latest deferral is another reminder of the importance of including potential care costs in your retirement planning and not relying upon the government.
Just as significantly meeting the costs of long-term care can decimate inheritances: in England the state only pays in full once your total assets are worth less than £14,250.
If you want to consider your options – or those of an ageing parent – please contact us or call 01825 76 33 66.