The government is promising an overhaul of the way social care is funded in England. Here’s what is being proposed:
- People will no longer pay more than £86,000 in care costs – that is, for actual care, rather than accommodation – over their lifetime, from October 2023.
- Once people have reached this cap, ongoing costs for personal care will be paid for by local authorities. It’s important to note that this only relates to care costs and will not cover accommodation or food costs so it remains to be seen how local authorities and care providers will quantify the care element.
- Those with between £20,000 and £100,000 in assets will get means-tested help towards costs from their local council.
- Those who own less than £20,000 will not have to pay towards care costs from their assets at all, but might have to contribute from their income.
How will the changes be funded?
- National Insurance (NI) – which working people and their employers pay to ensure benefits like the state pension – will rise by 1.25% from next April.
- From April 2023, this extra payment will become a separate tax – called the Health and Social Care Levy – on earned income. It will show up separately on payslips.
- The levy – unlike NI – will also be paid by people who continue to work beyond retirement age.
- The government says the changes will cost £255 a year for someone earning £30,000, and £505 a year for someone on £50,000.
- Shareholders will also have to pay 1.25% more in tax on the profits they make.
What is The Care Act?
The Care Act 2014 is the law that sets out how adult social care in England should be provided. It requires local authorities to make sure that people who live in their areas: receive services that prevent their care needs from becoming more serious or delay the impact of their needs.