Long-term care advice should be provided by regulated and appropriately qualified financial advisers to help consumers navigate the “complex” care system, to which new reforms are failing to bring clarity, Partnership said.
In a report on product innovation published today (30 October) by the Association of Professional Financial Advisers, the annuity specialist social said care reforms under the Care Act 2014, due to be phased in over 2015 and 2016, make the system “in some ways... more complicated”.
Under the statutory guidance for the Care Act, local councils have to refer people to advice that is “independent” of the local authority, which would include charities and other organisations.
Partnership and others were pushing for the government to amend the bill to force local authorities to refer people in need of long-term care to regulated financial advisers, but this was rejected in July 2013 amid concern over past financial services scandals.
Graham Duffy, care specialist for retirement at Partnership, flagged myriad complexities and vagaries under the new system which would mean fully regulated and qualified advisers would be best placed to support self-funders.
The £72,000 care costs cap only relates to the physical care carried out by care assistants, not to general living costs or accommodation costs, in a care home for instance. This means only part of the cost incurred counts to the cap, making calculating the ultimate amount that an individual will pay difficult.
Mr Duffy said: “How many people fully understand this? Suitably qualified advisers will be able to explain what is and isn’t included in the cap calculation.
“The eligibility criteria for entry into the capped system is going to be set at the ‘substantial’ need level as is the current system, meaning that those who are assessed as having only a moderate needs or lower will be excluded from the capped system until they reach ‘substantial’ need level.
“This could actually be more confusing for people than the cap itself.”
Mr Duffy added that the increase in capital limits is also a “potential area for confusion”.
Under the current system, “tariff income” is charged at the rate of £1 per week for each £250 of capital between the upper limit of £23,250 and the lower limit of £14,250.
Under the new system, if your property is included in the financial assessment, the upper capital limit will be increased to £118,000 and the lower limit to £17,000. If property is not included, the upper capital limit is only increasing to £27,000.
Tariff income will still apply at the rate of £1 per £250, meaning at £118,000 your contribution would be £404 per week.
Mr Duffy emphasised that advice on the ways to pay for care should be provided by a regulated, qualified financial adviser. “A Solla [Society of Later Life Advisers] accredited adviser will also have the soft skills required to impart that knowledge at a very stressful time for all concerned.”
donia.o’loughlin@ft.com
