ProtectionDec 23 2015

Care assessment

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Care assessment

One of the most significant reforms of care and support, the Care Act 2014, passed into law in May 2014. But, while the first part was introduced in April 2015, the second element has been delayed until 2020, creating much uncertainty for those advising clients on care fees funding.

This delay affects two key elements of the reforms, which were originally timetabled to come into force in April 2016. As well as an increase to the thresholds for means-tested support (which would have seen the upper limit rise from £23,250 to £118,000) the £72,000 cap on care costs is also on hold.

Under pressure

Although it is still committed to introducing the cap, the government announced the delay in response to concerns raised by the Local Government Association. While figures from the Institute and Faculty of Actuaries show that it would take at least four years before anyone entering care would reach the cap, local authorities would feel the financial hit much earlier. In particular, as they are responsible for managing the care cap, they would require additional resources to provide the necessary assessments to determine an individual’s eligibility for it.

To help take some of the pressure off local authorities, chancellor George Osborne announced a new social care precept of up to 2 per cent on council tax, to enable authorities to raise £2bn for the care system. However, this has already been labelled as just a sticking plaster by the National Pensioners’ Convention.

The delay also raises doubts about whether this element of the Care Act 2014 will ever be introduced. “2020 is such a long way off. A reasonable person would be forgiven for thinking the government was pushing it into the long grass altogether,” says Jim Boyd, corporate affairs director at Partnership. “But even if it does introduce it, the delay creates uncertainty, which will stop advisers and consumers taking action to plan ahead.”

Care options

While care fees funding may be in limbo, several of the insurers have added care options to their whole-of-life products. These are designed to accelerate payment of a proportion of the sum assured if someone needs care.

The first to launch was Vitality Life back in November 2014. Its product, Lifestyle Care Cover, is a whole-of-life plan which, as well as paying out on death, will also pay out if the policyholder suffers an illness which leaves them permanently incapable of looking after themselves.