The Care Act still holds uncertainties, particularly over what difference the cap on care fees will mean for self-funders, writes Andrew James, advice policy manager at Towry.
I note that it is over a year since I penned my thoughts on the Government's proposals on care funding in England following the report from the Dilnot Commission.
In that time the Care Bill has made its slow progress through Parliament and we finally have the Care Act 2014 in place. We still await the thoughts of the other devolved powers in the UK.
In the interim between the original announcements and the final Act being passed, the date for bringing in the new proposals has been bought forward by a year to April 2016.
The maximum cost an individual can pay out prior to reaching the cap has been reduced to £72,000from £75,000 owing to the earlier start date although none of this, other than the start date, has been confirmed in the Act.
That leaves all the financial matters regarding the level of the cap, as well as how those needing care will be assessed on their income and assets, in the hands of the Secretary of State and for future legislation.
The question is whether this will all survive the General Election due next year and potentially a new Government in power.
Hopefully so, as while the proposals leave a great deal to be desired, the clarity for all those affected by the costs of long-term care will at least be there, meaning that longer term planning for individuals and the industry itself can be undertaken.
Assuming we do get underway with previously announced caps then what difference will this really make?
The raising of the threshold for means tested support - below which local authorities will need to provide support for people - to over £100,000 will certainly aid those on lower levels of assets and hopefully ensure that some of their hard earned money can still be saved for their children.
However, almost everyone who owns a property is going to be over this figure, so if and when they need to enter a care home they will be self funding and ineligible for local authority support.
There will be the ability to defer payments subject to suitable security being available, but as interest will be charged this will in most cases merely defer the time until the house needs to be sold.
With the cap at £72,000 and only covering what the Local Authority assess as care needs - so not anything like food and accommodation costs - how long will it take someone to reach the cap?
If we take an average weekly cost of a care facility as £750 per week, the level of care costs within the overall figure may only come out at say £400.
That would mean the cap would not be reached for more than three years. With the average stay in a care home being somewhere between two and three years it is likely that most people, other than those requiring a longer term stay, will still be fully self funding.
It is true that the cost of care before entering a care home will also start to eat into the cap but even so the overall benefit of this legislation is likely to be limited for most.
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