Care home funding cap: Care Home Funding Advocates is continuing to follow the story

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Care Home Funding Advocates can report that government is due to announce its “fully-funded” plan to cap at £75,000 the amount elderly people in England have to pay for social care.

There will also be a rise from £23,250 to £123,000 in the amount of assets people have before having to contribute to the costs of basic nursing care.

Health secretary Jeremy Hunt said the “scandal” of many people selling homes to pay care bills must be tackled.

Labour said the country needed “a far bigger and bolder response”.

At present, up to 40,000 people every year are forced into selling their homes because they face unlimited care bills, says Mr Hunt – who will set out the plan in a statement to the Commons.

Speaking during a visit to a residential home on Monday, Mr Hunt said what was being proposed would be a “very profound change” but it was essential to help people who found themselves “by a cruel twist of fate having to do the one thing they want to do least of all which is to lose their own home”.

While costs vary hugely, it is estimated that half of all people turning 65 in future will have to pay up to £20,000 towards their basic nursing care – such as help to get washed and dressed – while, for one in ten, the figure will be above £100,000.

The government is proposing to cap the amount that anyone will have to pay in their lifetime at £75,000.

However, this figure would only cover the cost of nursing care and people would still have to pay for accommodation and food – which averages about £7,000-£10,000 a year, and which will reportedly be capped at £12,500 a year under Mr Hunt’s plan.

If the changes are approved, people are only expected to start receiving support above the £75,000 cap by 2019 at the earliest.

But the hope is that, by establishing the principle that the state will cover the really high costs, people will start planning for their future care needs in the way their do for their pensions in retirement

There are a variety of ways in which the elderly with the means to do so can free up £75,000, but one hope is that the insurance industry will develop products that cover old-age care.

Mr Hunt said that by setting an upper limit to how much people have to pay, then “it makes it possible for insurance companies to offer policies, for people to have options on their pensions, so that anything you have to pay under the cap is covered”.

‘Desperate struggle’

The government is also expected to increase the means-tested threshold – there to ensure the less well-off get state help towards their care costs.

Currently anyone with assets of more than £23,250 has to pay for their care. Under the plans, it is likely the threshold will rise to £123,000 for people who need to go into a care home. That reflects the fact that rising property prices over the years have effectively meant any home-owner falls outside the state system.


Mr Hunt is also expected to reveal that the plans, expected to cost about £1bn a year, will be part-funded by freezing the inheritance tax threshold – at £325,000 for individuals and £650,000 for couples – for three years from 2015.

That is despite Chancellor George Osborne’s Autumn Statement pledge, in December, to raise the threshold by 1% – to £329,000 for individuals and £658,000 for couples – in 2015/2016. Other funding will come from previously-announced changes to National Insurance and pensions.

Former Lib Dem care services minister Paul Burstow said the proposals would amount to the biggest change in adult social care since the existing system was conceived in 1948 and provide greater “fairness and predictability”.

Labour said the announcement was a “small step forward” but the changes would not take affect for many years and immediate action was needed.

“These proposals won’t do anything for the hundreds of thousands of elderly and disabled people who are facing a desperate daily struggle to get the care and support they need right now,” shadow minister for care and older people Liz Kendall said.

“We need a far bigger and bolder response to meet the needs of our ageing population: a genuinely integrated NHS and social care system which helps older people stay healthy and living independently in their own homes for as long as possible.”

‘Catastrophic risk’

Economist Andrew Dilnot, whose review into the future of social care recommended a basic care cap of between £25,000 and £50,000, said the proposals were “not perfect” but the current system was a “complete disaster” and he hoped the new framework would “radically reduce” people’s anxieties about how they would cope in their old age.

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