Many people fear that the cost of care could force them to sell their own home and mean they leave little or nothing on their death to their loved ones. In response to such fears the Government has announced a cap on care costs, to be set at £72,000.
But how does this work for you? Will it simply cap the costs you pay at £72,000? Will it stop you having to sell your home?
There are several key parts to the reforms:
- The introduction of a cap of £72,000 on eligible care costs, to be introduced in England from 2020. You should note this cap only applies to care costs and not the costs of accommodation in the care home
- An increase in the lower threshold from £14,350 to £17,000
- An increase to the upper threshold from £23,250 to £27,000 (if no property is included)
- An increase to the upper threshold to £118,000 (if property is included)
- A deferred payment system, which should stop you from having to sell your home during your lifetime to pay for the cost of care. You should be aware eligibility criteria apply to this.
How will the reforms affect you?
Despite the headlines, the cap of £72,000 doesn’t simply mean your Local Authority will immediately start to pay your fees, once you have paid £72,000 towards the cost of your care.
The £72,000 cap only applies to the cost of care and crucially not to the amount you pay for accommodation in a care home. In other words, the cost of accommodation, food, heat and light, and other ‘general living’ costs are excluded from the £72,000 cap. Given average life expectancies for people in care it is highly likely many people’s care bills will fall below the £72,000 overall cap.
In a further blow to those people calling for more fundamental reform, the cap only applies to the Local Authority rate of care costs, not what you are actually paying.