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This article was published on September 23rd, 2021
A new social care reform plan in the form of a Social Care levy has been voted in by MPs to reform the Adult Social Care System.
From April 2022, the Government will introduce a new, UK-wide 1.25% Health & Social Care levy, ring-fenced for Health and Social Care. This will be based on National Insurance contributions.
The policy will also place a cap of £86,000 on an individual’s lifetime care costs in England and raise the means-testing threshold for state contributions for the cost of care to £100,000.
The cap of £86,000, which begins in October 2023, will apply to the cost of personal care, for daily tasks such as washing, dressing and eating.
But as always the devil is in the detail: the daily living costs of a care home – those associated with food, energy bills and accommodation, will not count towards the cap.
The Government has not said how much people should be prepared to contribute to these daily living costs, care homes do not usually itemise them. This could mean that even when the cap has been met a person could still face £1000 monthly bills for living costs.
In some ways, this is understandable, after all, they would be liable for living costs if they remained in their own home.
It could mean, based on the average care home cost of £36,000 per annum that only £24,000 of the spending counts towards the cap once £12,000 living costs are taken off.
Crucially, spending on care will count towards the cap only for people assessed by the local council as in need enough to be eligible. Only the frailest will qualify.
Due to these uncertainties, we will still be advising our clients to continue with careful Will planning to safeguard their homes and assets.
Further details of the Social Care Reform Plan will be published in the Autumn Budget on 27 October 2021.