The Care Cap: Is it as Good as it Sounds?

Friday, 26 August 2022 08:53

From October 2023, there will be a lifetime cap of £86,000 for the cost of a person’s care.

The premise is that every individual requiring care will pay a maximum of £86,000 for their care in their lifetime – sounds good doesn’t it?

The government have now set out more detail about how this is expected to work in practice and what this means for people requiring care at home and also in a residential setting.

Those requiring care currently fund their own care if their assets exceed more than £23,250. This upper threshold will increase to £100,000. The lower cap which is currently £14,250 is rising to £20,000. This means that if you have assets between £20,000 and £100,000 you will pay a contribution from your capital; for every £250 in capital you have, you pay £1 a week towards the cost of your care. For example, if you have £90,000 in cash assets, you would contribute £280 a week for your care from the capital. Your income is also taken into account. If your assets fall below £20,000 you will no longer contribute from your capital but your income is still taken into account.

Your property is included in the value of your assets if a property disregard does not apply – property disregards include where you are having care at home or if you are in care but your spouse is still residing at home.

In addition to the increase in the thresholds, any money that you pay towards your personal care cost (whether at home or in a residential care setting) goes towards your care cap which is set at £86,000. There is a distinction between the cost for care and the cost of Daily Living Contribution (DLC) and provided you have more than £20,000, you will continue to pay towards the DLC even when you hit the care cap of £86,000. The DLC covers the cost of rent, food and utility bills and has been set at £200 per week rising with inflation (so likely higher when the cap starts). The reason for this is so that people living at home are not penalised as they would still be paying their DLC as normal.

Whilst this is better than the current system, people will still end up paying more than the £86,000 ‘cap’ due to this addition of the DLC.

People who are in care or are receiving care already will not start paying towards the cost until October 2023 so any money being spent now does not count. Every person that needs care will also need to be assessed by social services so that they can open up a care account for each individual. If you do not have an assessment then any money paid for care does not count towards the care cap.

Planning for the future is therefore very important and there may be options available to you in your Wills which can protect your assets for your future generations.

Melissa Reeds can help to protect your assets for future generations and provide assistance with care related queries. Please contact melissa.reeds@gdlegalservices.co.uk or 01983 527878 for a free initial consultation.

The Care Cap: Is it as Good as it Sounds?

Share

More from Features

Get Social