Cap on Care Fees
A policy that has been mooted for years by successive governments is that of a ‘care fee cap’. Rather unexpectedly the news dropped on the 7th September 2021 that the cap was finally to become a reality.
There was at the time no cap on care costs but it will help to set out the former capital limits a person requiring care is allowed to have before the state will assist with care costs.
- Capital assets above £23,250
- Fully self-funded
- Assets between £14,250 and £23,250
- Partially funded by Local Authority
- Assets below £14,250
- Fully funded by Local Authority
- Personal expense allowance £24.90
Weekly allowance a person can spend on themselves when funded by Local Authority
The cap on care costs is to be set at £86,000 over a person’s lifetime. It has been confirmed, although not widely published, that this will not cover accommodation, food and other related non care costs known as ‘daily living costs’. No mention of this distinction was made in the 33 page plan released by the government.
The changes to the thresholds due to come into force from April 2022 are set out below.
- Capital assets above £100,000
- Fully self-funding and the care cap applies
- Assets between £20,000 and £100,000
- Partially funded by Local Authority and the care cap will apply if limit not already reached
- Assets below £20,000
- Fully funded by Local Authority
- Personal expense allowance £? to be increased but no details yet
- Weekly allowance a person can spend on themselves when funded by Local Authority
Although expected at the announcement, no promise was made by Boris Johnson that you will not have to sell your home. It is a sad reality that if you have insufficient cash funds and your property is treated as part of your assets for assessment purposes that your home may still need to be sold.
This is an area that still requires additional guidance from the government and it is important to keep abreast of further clarification. What has been confirmed is that the cap will not be backdated, so those wanting to plan for future care cannot rely on the new rules before they are implemented. If you were considering making a gift of excess funds above the care cap you will need to think carefully and carry out the complex calculations of what you are required to retain, before you discover that you have gifted money you are subsequently informed should not have left your ownership. Even worse, those currently in care will not have costs already paid set against the cap. If you or your family are required to pay top up fees to the care home, it has been confirmed that these will not be set against the cap on care.
The best way for a couple to ensure that half of your property value is protected from all care fees, including those related to daily living costs, is to set up a Life Interest Trust in your Wills. This will have the effect of ensuring your spouse can benefit from living in the property and ring fenced away from the local authority who will look to claw back care fee payments.
Lindsay Taylor is a Senior Associate Solicitor based at our Hythe Office. For your conveyancing and private client needs you can contact CGM Solicitors on 02380 842765 for an appointment.