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Ian Francis, Specialist Adviser
Social care reform news
- But what does it mean for everyday people?

The government published proposals last year to reform how we pay for social care - that's the care not paid for by the NHS, whether by yourself (as a self-funder) or with a contribution from the Local Authority.

  • "Care costs" relates to paying for "components of any care package considered to be related to personal care".
  • "Daily living costs" relate to rent, food and utility bills, whether in a care home or living in their own home.

From October 2023, each Local Authority will open an account for those people paying care costs.

  • No one will pay more than £86,000 for what the Local Authority deems as eligible care and support needs.
  • That limit of £86,000 only relates to care costs and not daily living costs.
  • Only the money a local authority assesses a person as needing to spend on care will count towards the cap, so income from benefits will not be included in its cap on care costs.
  • Money that the Local Authority contributes to the cost of care will not be included in the care cap calculation, which will severely impact those who have lower assets.
  • If somebody wants to pay more for their care than the Local Authority deems necessary, they will have to pay for it themselves and the amount spent will not count towards the cap.
  • In our part of the world, it will take an average care home resident around 4 years to hit the £86,000 cap, by which time they’ll probably have spent around £200,000 on care home fees (plus anything already spent pre-October 2023).

However, in July 2022 the Government announced that it was delaying the implementation of these changes into various stages, between October 2023 and April 2025. So it will be more important than ever to understand each Local Authority's staging plans to understand how your loved ones are affected. Most obviously will be that more people will contribute more money, for longer, to the cost of their care.

When do you qualify for Local Authority help for care costs?

As now, you must have a qualifying need for care to be supported by the Local Authority.

But, the financial rules for qualifying are changing - at the earliest, from October 2023 the upper capital limit of your assets will rise to £100,000 and the lower capital limit will increase to £20,000, in a given Local Authority area. Remember though that implementation of this provision is being staged by Local Authorities between October 2023 and April 2025.
When reform is implemented in the Local Authority area:

  • Anyone with assets above the upper limit will be expected to pay for their care themselves.
  • Anyone with less than £20,000 of assets will not have to pay anything towards their care from their assets (although they will contribute from their income).
  • People with between £20,000 and £100,000 of assets will be eligible for some means-tested financial support on a sliding scale.

The changes mean that a lot more people will be paying far more towards the cost of care than they may have expected. If you want care in addition to that which the Local Authority assesses you for, such as longer visits in your home, amenities in your care home, or a better quality room, none of this will count towards the care cap.

- Are any care costs not covered by the Local Authority?

The cost that counts towards the care cap will also not include any daily living costs.

So, for example, in a care home placement, it will only be the part of the cost which the local authority deems to be a reasonable cost of providing care which will count towards the cap, not any part of the care home fee which covers accommodation or food, or any enhanced aspect of the cost recognising superior accommodation, location or facilities.

People will also remain responsible for their daily living costs after they have met the cap.

The Government is working on the daily living costs component being £200 per week in 2022.

When does the Local Authority step-in for living costs?

The Local Authority will only step in, at the earliest from October 2023, towards your living costs, if you have no assets left or can only make a partial contribution - provided you haven't intentionally deprived yourself.

Remember though that implementation of this provision is being staged by Local Authorities between October 2023 and April 2025.

What Our Clients Say

"What a great adviser Ian was, I can't recommend him enough.

"None-stop ideas and guidance to sort out the care my family needed to get organised. Nothing was too much trouble."

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We offer a free, no-obligation, initial telephone consultation for new clients to answer some initial questions and help you with some first steps.

After that, we will then ask if you would like to set aside more time at a good time of day for you, when we can meet in person, on video, or by phone, whichever is most convenient for you.

If you would like to use our services after our initial telephone call then we charge an hourly fee of £150, including travel time. We can also agree on a fixed fee depending on what you need.

What it means to be SOLLA accredited

As a financial planner accredited by SOLLA (the Society of Later Life Advisers), I know that the transition to elder care happens more smoothly and is often more aligned to the expectations of the individual and their family when plans are made in advance. This includes advanced planning around finances.

It’s often a surprise to people that later-life financial planning is a specialist area within the wider field of financial advice, but it is!

Clients requiring financial planning in their later life benefit from advice that is clear and concise. Such advice comes from an adviser that is suitably qualified and experienced to advise them and manage their financial planning.

This means you can work with an expert in funding care (whether for a care home or in-home care) and other later life financial matters – ensuring that money is one less thing to worry about when arranging for your own short or long-term care, or that of a parent.

We have been advising clients on long-term care, Lasting Powers of Attorney, Will writing and retirement solutions for several years now, backed up not just by professional qualifications but also by the membership of various professional bodies, most notably the Society of Later Life Advisers (SOLLA) and the Personal Finance Society.

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