Labour's Lord Hunt was right to highlight the practical difficulties of asking local authorities to assess all self-funders as part of long-term care reforms, adviser firm LEBC Group has said.
Speaking at a fringe event at the Labour Party Conference in Brighton, Hunt had warned about local authorities struggling to assess and monitor those eligible for the £72,000 cap on care costs and feared the system would collapse as a result.
Chancellor George Osborne had announced as part of the March budget plans to cap social care costs for self-funders, or those who do not qualify for financial assistance from their local authorities, at £72,000 in 2016. The Care Bill is currently being debated in parliament.
In addition, as part of the reforms there will be a greater onus on local authorities to monitor care users and to provide better access to information and advice.
Kay Ingram, divisional director of individual savings and investment at LEBC Group said: "We share Hunt's concerns about the capacity of local authorities to cope with this aspect of the Social Care Bill.
"This is however only one of our concerns. What is of more immediate significance is that the headlines surrounding the Social Care Bill give the public a very false impression that once they have spent £72,000 of their own money, all other care costs will be met for them. In practice the care costs cap will help relatively few people and almost no one who is in residential care now. "
Ingram highlighted the self-funding clock does not start to tick until 2016, so any money spent on care before then will not count. In addition, the costs of the hotel or bed and breakfast element of self-funders costs would be disregarded from what they have spent towards the £72,000.
Finally any fees spent on care in excess of the local authority cap on care costs would also be disregarded, she warned.
Ingram added: "Consequently an individual or their family may need to find much more than £72,000 in total before they get any significant help in funding from their local authority."
She also said the firm backed an amendment to the Care Bill instructing local authorities to refer those needing care to regulated financial advisers, which had been initially rejected in the House of Lords, but is to be re-submitted in a revised form.
Ingram said: "We also support Hunt's amendment to the Bill to require the referral of self-funders to financial advice which is not only independent of the local authority but must also be regulated independent advice. Without the backing of the consumer safeguards of regulated advice in this area, the referral of vulnerable people to non-regulated sources of advice could be a financial disaster for many families."
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