Social Care Reform Proposals – ‘Building Back Better’…
“Build Back better” is the name of the Government’s recently announced proposals for reform to health and social care. After several campaigns for reform, these proposals may be welcomed in theory, but what does this look like in practice?
The G overnment last week announced proposals to invest approximately £36 billion into the health and social care sector over the next 3 years. The aim is to address issues in the NHS and social care which have been both exacerbated and highlighted by the COVID-19 Pandemic.
As well as addressing specific problems, such as the NHS backlog of an anticipated £5.5million patients awaiting treatment in England (in addition to those in the wider UK), the funding is also intended to address concerns over the sustainability and fairness of social care funding.
How will this be funded?
The Government’s primary suggestion currently up for debate is to temporarily increase National Insurance Contributions by 1.25% from April 2022, before introducing a separate “Health & Social Care Levy” from April 2023, when NI Contributions will be adjusted down to current levels once again. The new Levy is also intended to apply for individuals over pension age.
They also propose an increased tax on dividends of 1.25%.
What does this mean for Social Care?
A cash injection of £26 billion is a great start to the social care reform many have campaigned for. However, when you dig a little deeper it appears that an alarmingly small proportion of this investment (around £5.4 billion) appears to have been specifically earmarked to support the social care sector directly.
The intention for this fund over the next 3 years is suggested to include the publicised “cap” on personal care, providing general support for the social care system and to support with funding for those with limited means.
In addition, a further policy document (a white paper) is anticipated to be prepared in the near future to further address these issues with a view to creating a better system of integration between health and social care.
The white paper is expected to consider the promotion of care which is “fair and accessible”, of “outstanding quality” and to promote the independence and choice of individuals. The current proposal acknowledges unfairness in the current system, which sees self-funders with assets paying more for care in order to subsidise those who are supported by the state.
In addition, there appears to be a drive to promote careers in social care, with better development and training opportunities, mental health support and improved recruitment. There also seems to be a drive in the new reforms for better support and advice for unpaid carers, improved availability of information and more investment in supported housing and grants for disability adaptations.
Changes to care funding in England – October 2023
Below is a summary of the current basic rules* for care funding in England, together with the Government’s new proposals.
|Level of assets||Current Rules|
|Over £23,250||Self-funder- You pay full cost for your care, whatever that may be.|
|£14,250-£23,250||Contribution – You pay all relevant income towards your care, plus a “tariff income” of £1 for every £250 you have in capital assets over £14,250.|
|Under £14,250||Supported – You pay your relevant income towards your care only. Nothing is paid from savings or capital.|
Property – Under current rules, your house is disregarded from your financial assessment in certain circumstances (for example if you, a spouse or dependant relative live there). This rule is intended to remain in some form under the new proposals.
|Level of assets||Proposed Rules|
|Over £100,000||Self-funder- You pay full cost for your care, whatever that may be.|
|£20,000-£100,000||Contribution – You pay all relevant income towards your care, but if this does not cover all of the care costs, you must contribute up to 20% of your “chargeable assets” each year.|
|Under £20,000||Supported – You pay your relevant income towards your care only. Nothing is paid from savings or capital.|
The proposals suggest that adults (of any age) who start to receive social care after October 2023 will benefit from the new changes.
From April 2022, there will also be inflation-linked increases to the amount an individual can retain from their income when paying towards care, which is currently only £24.90 per week for those in residential care facilities. (Minimum Income Guarantee / Personal Expenses Allowance)
What about the care cap?
The Government’s proposed “cap on personal care” will feature in the calculations above. Whilst this may have grabbed some attention in the headlines last week, it is worth noting that the cap will only apply to part of the services you pay for within a person’s “care fees”. In fact, “personal care may only make up a small amount of the overall cost you pay towards care. Other costs may be referred to generally as “care fees” but they actually represent “hotel” costs or “bed and board”, such as food and accommodation.
The proposed cap of £86,000 for personal care costs will only limit part of the care fees payable and may never be reached for some individuals, particularly when considering the generally limited life expectancy of individuals in care facilities.
It is unclear from the current proposal how the Government intends to monitor or regulate this to ensure that care providers do not take advantage by increasing the other costs to make up for the loss of “personal care” costs after the fee cap is reached.
Tollers await more clarity on the practical impact of the proposed reforms with anticipation.
The full plan for health and social care can be read here: Build Back Better: Our Plan for Health and Social Care – GOV.UK (www.gov.uk).
If you have concerns about a loved one’s care fees…Talk to Tollers Elderly and Vulnerable Client Unit (EVCU) on 01604 258 787, the team is on hand to guide you through as changes occur.
* Please note that this is a general overview relevant at the time of publication. As there will inevitably be some exceptions and disregards in income and capital not detailed here, you should consider seeking advice in relation to your individual circumstances.