How the cap on care costs works
22 July 2015
In England the cost of care will be capped from 2020 (the government has delayed the original 2016 date). It will mean for the first time since the system was created after the Second World War, that there will be a limit on how much people pay for their care in their old age. This covers the help people get in their own homes for tasks such as washing and dressing, to places in residential or nursing care homes. Social care is means-tested, which means only the poorest get state help towards their costs. Currently anyone with assets of over PS23,250 has to pay the full cost of their care. If you are being cared for in your own home, that figure only takes into account any savings, stocks or shares you have. If you are moving into a care home the value of your home may be taken into account, depending on your circumstances. The costs people face, therefore, can run into thousands of pounds. One in 10 who enter the care system end up paying over PS100,000 in fees. About 4m older people - nearly half the over 65 population - have care needs. But only 850,000 qualify for state help. Some 370,000 of these are getting help in their home and nearly 240,000 in care homes or nursing homes. The rest get help from other services, such as day care, meals on wheels, or via home adaptations and equipments. Once those who fund themselves are taken into account, the numbers getting help in their own home rises to about 850,000 and in care and nursing homes to about 450,000.  Another 1.5m are reported to be relying on family and friends to provide support. From April 2020 the amount you pay for care if you are over 65 is being capped at PS72,000. To be eligible, you first need to be assessed by your council as having very high needs. Whether care is provided in your home or in a residential home, only the rate set by the council will count towards the cap. In residential care, you will still be responsible for food and lodging when you hit the cap. A flat rate of PS230 a week is proposed. The government says no one will be worse off under these changes. It is estimated only one in eight people will reach the cap, mainly because people do not live long enough in care homes to accrue such spending on care. That depends on how much you have in savings and assets. People in care homes can get help if their assets drop below PS118,000. That figure may include the value of your home. If a close relative lives in the property, such as your spouse, the home is not taken into account in the assessment, but the threshold drops to PS27,000. The threshold is also PS27,000 if you are getting help in your own home or from other community services. Once you drop below these thresholds an assessment is made to calculate how much the council will contribute to your care. Those people with high incomes, say from a good occupational pension, may still be liable for the full cost of their care. If you are funding yourself, you will be able to ask your council to negotiate the care home fee for you. But many care homes say the local authority rate doesn't cover their costs. Some people may choose to pay more to stay in a care home with better services and facilities. This is known as a top-up fee. Anything you pay above the council rate will not count towards the cap. Once you reach the cap, you will still be responsible for paying any extra costs. The government has said no one should have to sell their home to meet care costs. From April 2015, all councils are expected to offer deferred payment schemes which mean that the costs will be taken from your estate after death. It is expected 2.65% interest will be charged on the loan. Councils only have to offer these if an individual has less than PS23,250 in assets other than their property, although they are free to be more generous if they wish.
Social care is means-tested, which means only the poorest get state help towards their costs. Currently anyone with assets of over PS23,250 has to pay the full cost of their care. If you are being cared for in your own home, that figure only takes into account any savings, stocks or shares you have. If you are moving into a care home the value of your home may be taken into account, depending on your circumstances. The costs people face, therefore, can run into thousands of pounds. One in 10 who enter the care system end up paying over PS100,000 in fees.
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How does the system work currently?
About 4m older people - nearly half the over 65 population - have care needs. But only 850,000 qualify for state help. Some 370,000 of these are getting help in their home and nearly 240,000 in care homes or nursing homes. The rest get help from other services, such as day care, meals on wheels, or via home adaptations and equipments. Once those who fund themselves are taken into account, the numbers getting help in their own home rises to about 850,000 and in care and nursing homes to about 450,000.  Another 1.5m are reported to be relying on family and friends to provide support.
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How many people get help?
From April 2020 the amount you pay for care if you are over 65 is being capped at PS72,000. To be eligible, you first need to be assessed by your council as having very high needs. Whether care is provided in your home or in a residential home, only the rate set by the council will count towards the cap. In residential care, you will still be responsible for food and lodging when you hit the cap. A flat rate of PS230 a week is proposed. The government says no one will be worse off under these changes. It is estimated only one in eight people will reach the cap, mainly because people do not live long enough in care homes to accrue such spending on care.
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So how will the cap work?
That depends on how much you have in savings and assets. People in care homes can get help if their assets drop below PS118,000. That figure may include the value of your home. If a close relative lives in the property, such as your spouse, the home is not taken into account in the assessment, but the threshold drops to PS27,000. The threshold is also PS27,000 if you are getting help in your own home or from other community services. Once you drop below these thresholds an assessment is made to calculate how much the council will contribute to your care. Those people with high incomes, say from a good occupational pension, may still be liable for the full cost of their care.
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Can I get help with care costs before I reach the cap?
If you are funding yourself, you will be able to ask your council to negotiate the care home fee for you. But many care homes say the local authority rate doesn't cover their costs. Some people may choose to pay more to stay in a care home with better services and facilities. This is known as a top-up fee. Anything you pay above the council rate will not count towards the cap. Once you reach the cap, you will still be responsible for paying any extra costs.
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What if my care home charges more than the council rate?
The government has said no one should have to sell their home to meet care costs. From April 2015, all councils are expected to offer deferred payment schemes which mean that the costs will be taken from your estate after death. It is expected 2.65% interest will be charged on the loan. Councils only have to offer these if an individual has less than PS23,250 in assets other than their property, although they are free to be more generous if they wish.
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Will I have to sell my home to meet the costs?