This has been a long time coming as successive Governments have not had the stomach to bring in what needed to be bold measures to plug the gargantuan gap we have in our health and care system.

Some may think that they have cynically used the pandemic and the huge groundswell of public gratitude towards the NHS to give them the opportunity to get this through. Timing, as they say is everything…. 

So, what are the headlines and what does it really mean for you? 

Care Cost Cap of £86,000

On the face of it this means you will never ever pay more than £86,000 towards the cost of your care – however it is not quite as simple as that. 

When you go into care the costs are broken down into two elements – the “care element” and the “board & lodgings” element; you will always be expected to pay for your own board and lodgings so the care cost cap only applies to what you pay towards care. 

Once you reach the cap supposedly the Local Authority (LA) step in to pay for your care – however each LA have published maximum rates they will pay, which as you might imagine are on the lower end of the scale. So, if you have chosen to go into a 5* care home then the LA rate will only cover some of your costs. This means that if you wish to stay in the 5* home rather than be downgraded to a LA home then you will be expected to pay the difference. 

These rules become effective in October 2023 but what is not clear currently is if you have already incurred care fees costs at that point whether they will count towards your own £86,000 cap. The cynic in me suspects not, otherwise they would have sung that from the rooftops.

Changes to the Means Test 

At present you are expected to pay for your care if you have income to do so and then if your income does not cover your fees then you are expected to spend your savings and capital; this aspect won’t be changing. 

Currently you are expected to fully pay for your care until your capital drops to £23,250, and then the LA will help towards the costs until your capital is down to £14,250 – where they will pick up full costs (notwithstanding the points made above). This protects the last £14,250 to hand down to your family, you may sense a note of irony in my tone here! 

The new rules on the face of it sound far more generous – or are they?

From October 2023 when your capital drops to £100,000 the LA will partially assist, until your assets drop to £20,000, when they will fully fund. So, under the new regime in the worst case you could have £5,750 more to pass to your family – which might get them a family trip to Cornwall at current rates! 

As I write the full details of the Cap and the Means Test have not been fully published and I suspect there could still be a sting in the tail – taken together, based on what we know somebody like Richard Branson could get LA authority help in his 5* care home once he has spent £86,000, which sounds crazy; so what I am expecting is that there will be a ceiling value put on assets, above which the Care Fees Cap calculation will not apply. 

Where they pitch that figure will determine just how much impact these changes will have for most of our clients.

Please note that these changes are subject to consultation and require subsequent legislation to enact so there will be more to add in due course.