With the Autumn statement announcement on the 17^th November I am left wondering what the future for Care Reform in England will be.

At a high level the Care reforms were due to come in to effect in October 2023 with six  ’trailblazing’ local authorities due to go live in January 2023, next month! The plan was to cap the cost of care at £86,000 (there is currently no cap). The proposed cap on the lifetime cost of care  would apply to Self-Funders who have  relevant assets exceeding the ‘upper capital limit’ (UCL) (the point at which people become eligible to receive some financial support from their local authority). The UCL is currently £23,250 and was set to rise to £100,000. The ‘lower capital limit’ (LCL) at which point people will not have to pay anything for their care was also due to rise from £14,250 to £20,000. This will result in a lot more people having to pay more for their care than perhaps would otherwise have been the case.

According to the Chancellor, Jeremy Hunt, the reforms have been delayed for at least two years. This of course pushes the problem down the line until after the next general election (scheduled to be no later than January 2025) and leaves me somewhat sceptical as to what may happen.

The challenges facing our Social Care system are not going away though. At some point there will become a need for change. I was recently lucky enough to see Nadre Ahmed OBE (Chairman of the National Care Association) speak and sharing her views on the current situation. Nadre was explaining that it costs a lot more to keep someone in hospital for a night/week than in a care home however, care homes are struggling to recruit staff and therefore a lot of them do not have the capacity.

So what in reality could this delay to care funding mean?

The people and families that are immediately affected are those families who are already receiving care or will require care at some point in the next two years.

For those people who are yet to go in to care but who will do in the next two years it will mean that they may have to pay for their own care when that may not have been the case had the reforms been introduced in 2023 as proposed.

A main source of funding care for many will be the value of their home. Whether the home is sold or whether there is a Deferred Loan Agreement put in place by the local authority and secured against the value of the home, the impact of the delay will be felt.

The Laing Buisson Report Care Homes for Older People, 32nd edition (2022) illustrates the split in funded residential care for those aged 65+ as follows:

• Self-Funders 41.01%
• Local Authority outsourced (without top-ups) 30.56%
• Local Authority outsourced (with top-ups) 13.86%
• NHS funded 10.65%
• Local Authority in house 3.92%

For those Self-Funding (or privately paying) care home residents there is a strong argument that they have been keeping the residential care home sector afloat for some time, cross subsidising council-funded places by hundreds of pounds a week.

The Laing Buisson Report confirmed this position when it estimated the average weekly fee for residential care across England for those aged 65+ was £949 for self-funders and £647 for local authority funded placements; the corresponding figures for nursing care were £1,184 per week and £901 per week.

Given the financial predicament of local councils at the time of writing, this cross subsidy is only likely to have increased as local authorities look to impose greater control over their adult social care budgets.

At the same time as costs rising for Self-Funders, evidence suggests that the average time in residential care is greater for than for those dependent upon their local authority to pay for their care.

So in summary it is a bleak picture for those requiring care in the next two years and perhaps beyond. Time will tell of course what the real impact of the delay may be.

Funding for care can be a very confusing landscape to navigate and getting it wrong could be costly. It is vital that individuals and families seek financial planning advice from a qualified financial planning and legal specialists who will be able to understand the care and benefits system and apply them to the individual circumstances of their clients.

As an experienced and Accredited SOLLA (Society of Later Life Life Adviser) financial planner I am well placed to work with individuals and families to help them find their way through the spaghetti of information.

If the delay in the Care Reforms will affect you or anyone you know I would be happy to help.