Social care bill presents new opportunities for advice

For those in residential care, it is only care costs that will be capped. For consistency with those receiving care in their own home, individuals will be expected to continue to pay for daily living costs, effectively room and board. Here, to avoid subjective assessments of how each care home splits the costs up, for the purposes of the cap, a national, notional amount of £200 a week in 2021-22 prices has been set. 

So, in simple terms, my understanding is if a local authority would pay £700 a week to meet an individual’s needs in a care home, £500 a week paid by the individual will count towards the cap. If an individual chooses a more expensive facility charging £1,000 a week, then again it is £500 a week that counts towards the cap. The £300 top-up as well as the £200 a week deemed as daily living costs must continue to be paid after the cap is reached.

Local authorities will create a care account and personal budget for those needing care and will provide updates on progress towards the cap.

Means-tested support

Another key change is to the means-tested thresholds. Currently in England, individuals have to pay their full care costs until their assets have dropped below £23,250. The government then offers some means-tested support.

It is only once assets fall to £14,250 that individuals are no longer asked to contribute from assets. These limits are being increased significantly to £100,000 (upper capital limit) and £20,000 (lower capital limit) and will be uprated at ministers’ discretion, perhaps in line with price inflation.

This will mean many more individuals will start receiving some government support sooner. Once your assets are below the upper capital limit, you will be asked to pay a means-tested tariff. This will be calculated as £1 a week for every £250 of remaining capital between the lower and upper limits. 

Those who require care for lengthy periods avoid facing catastrophic costs.

If you have not reached the cap before your assets fall below the upper capital limit (or indeed even the lower limit), you may still be asked to contribute additionally "what you can afford from income". You no longer need to contribute to eligible care costs from income once you have reached the cap.

Where the government is providing means-tested support and paying part of an individual’s care costs, it is only what the individual contributes, not the means-tested support, which count towards the cap. The House of Lords challenged this but without success.