Delay to £86k care spending cap is a ‘betrayal’ of older people, who may now pay tens of thousands extra before 2025 launch date, say critics
The Government is under fire for postponing the launch of a £86,000 lifetime care spending cap until autumn 2025.
The announcement of the two-year delay in today’s Autumn Statement prompted an accusation of ‘betrayal’ of older people by one critic.
Another said ‘many simply won’t live to see the benefit’, and claimed the decision could easily cost those paying towards their care an additional £26,000 for every year of delay.
Spending cap: Older people may now have to fork out tens of thousands of pounds extra before the 2025 launch date
The previous scrapping of a 1.25 per cent National Insurance hike meant to fund both the NHS and social care had already sparked fears that plans for a cap announced by the Boris Johnson government might have to wait.
Reforms originally planned for next autumn would introduce an £86,000 cap on how much an individual has to spend on care, and raise the threshold to start receiving support from £23,250 to £100,000.
However, experts say there is a flaw in the plan and that poorer people could still spend most of their assets including their home if they need care, while the better off would forfeit a relatively small chunk of their wealth.
The new lifetime spending cap will also be based on some, but not all, of people’s private contributions towards care, rather than on their total costs.
It will exclude anything local authorities deem unnecessary or not ‘eligible’ for your care, any financial support they provide towards your costs, top-up payments you might make for premium amenities like better rooms, daily living or ‘hotel and accommodation’ costs, and any spending on care before October 2025.
Today, the Treasury said: ‘To protect high-quality front-line public services, access to funding for the NHS and social care is being increased by up to £8billion in 2024-25.
‘This will enable the NHS to take action to improve access to urgent and emergency care, get waiting times down, and will mean double the number of people can be released from hospital into care every day from 2024.’
Stephen Lowe, a director at retirement specialist Just Group, said: ‘Millions of people up and down the country will feel betrayed by the Chancellor’s decision to delay the social care reforms for two more years.
‘These reforms have been decades in the making and were a flagship promise of this government’s election manifesto.
‘Many people will have been counting on this policy being implemented and have now been forced back to the drawing board.
‘Make no mistake, the Chancellor’s actions today will leave many more elderly people making last minute decisions about their care arrangements, when they and their loved ones are at a point of great distress.’
Steven Cameron, pensions director at financial services firm Aegon, said: ‘Kicking the social care can down the road again with a two-year delay will come as a blow to thousands expecting it to go live in October 2023 and will mean many simply won’t live to see the benefit.
‘It could easily cost those paying towards their care an additional £26,000 for every year of delay, while also sorely depleting the savings of those with assets under £100,000 who’ll need to wait another two years for promised extra means tested support.’
He added: ‘The £86,000 cap on ‘eligible’ personal contributions to care costs means those who require care for lengthy periods will, once implemented, no longer face paying indefinite or “catastrophic” costs for their care which can currently wipe out life savings.
‘Eligible personal contributions made from October 2023 onwards were to have counted towards the cap but the two years’ deferral means only personal contributions made after October 2025 will count.
‘Local authorities will set “eligible” costs, based on what they’d pay for the care they assess an individual as needing.
‘If in a residential care home, you’ll need to pay for “daily living costs” or “room and board” and the new deal sets this at a national, notional amount of £200 per week.’
Cameron explained that if a local authority paid £700 a week to a care home, £200 of this would be considered as daily living costs, which even under the new deal must be paid indefinitely.
‘Five hundred pounds a week will count as eligible care costs towards the cap but with a 52-week delay, individuals will have paid £26,000 before the clock starts ticking under the new deal,’ he said.