Funding Care Home bills – limit of £75,000 but few may ever reach the capPosted on:
Pensioners will pay up to £75,000 but no more for their long-term care in old age under reforms agreed by David Cameron and Nick Clegg.
Under the plan, which could be announced next week, elderly and disabled adults will be given state protection against unlimited care home fees for the first time.
But it will not be implemented before 2015 and will still require individuals to pay care bills up to the level of the cap.
It may make little difference to many families, it is feared.
Pensioners will be told to buy private insurance to cover them up to the new limit, expected to be between £65,000 and £75,000. Individuals could be offered the choice of taking a lower lump sum when they retire, and converting the rest into care protection insurance.
Currently, one in 10 adults faces a lifetime bill of more than £100,000 for care. Only the poorest, with total assets worth less than £23,000, receive assistance from the state and an estimated 40,000 people have to sell their homes each year to pay for care.
The threshold for means-tested support is also expected to be increased to £100,000.
The reform follows a commitment to tackle care costs by the Prime Minister and Deputy Prime Minister in the Coalition’s midterm review, earlier this month. But the Government is likely to delay its implementation until 2015 or later to reduce the bill to the Treasury, estimated at up to £700 million a year.
Michelle Mitchell, director of the charity Age UK, said that many pensioners were “fearful” about future care bills.
“The Government has long promised this and they must act urgently if they are to address the funding crisis affecting social care,” she added.
“Until there is a system that makes it safe to save and clarifies the extent of personal responsibility, the crisis will just keep on worsening.”
Critics fear that the plan may make little difference to many families. The package may not limit the “hotel cost” of a care home, including accommodation, food, and heating. The cap will only cover the bill for the “care” provided, such as assistance with washing and dressing.
Some estimates suggest elderly residents in the South East will still have to pay more than £200,000 on nursing home bills before care costs reach the cap.
In a report in 2011, Andrew Dilnot, an economist, suggested a limit of between £25,000 and £50,000. Shortly afterwards, he indicated that a cap of £60,000 would also be viable.
Ministers have looked at the “high end” of that range, and raised it to take account of inflation between then and its likely implementation.
Care Home Funding Advocates are keen to highlight that if an individual has a primary health need the funding should be met through NHS Continuing Healthcare.