The so called ‘cap on care costs’
Advice | 9 July 2015
Following the introduction of the Care Act 2014 many of us have been lulled into a false sense of security that we will no longer be responsible for paying for our own care once we have incurred care fees of £72,000. But the real question on everybody’s minds is ‘what is the catch?’
Following the introduction of the Care Act 2014 many of us have been lulled into a false sense of security that we will no longer be responsible for paying for our own care once we have incurred care fees of £72,000. But the real question on everybody’s minds is ‘what is the catch?’
Sections 15 and 16 of the Care Act 2014 introduce what is now known as the ‘cap on care costs’. This will apply to all those requiring care from April 2016.
For those requiring care in a residential or nursing home, individuals with assets including the value of their own home (which is not subject to a disregard) of more than £118,000 will be expected to fund the cost of their own care. For those who receive care at home this threshold will be set at £27,000 and will not take into account the value of any property.
It is only when the value of an individual’s assets falls below £17,000 that the Local Authority will consider providing financial support towards care and/or living costs if the individual cannot cover those costs themselves. But as many of us understand it, the maximum we will be expected to pay towards the cost of our own care will be capped at £72,000.
Firstly, it is important to highlight that there will be no cap on care fees for those requiring care before they reach the age of 25. Secondly for those already incurring care fees prior to April 2015 any costs already accrued will not count towards the cap.
For those individuals who are responsible for self-funding the cost of their own care the accrued costs will only refer to the amount that the Local Authority would have spent in meeting the need of the individuals themselves and not what is actually being incurred.
Last but not least accrued costs will not take into account any general living costs that an individual requiring care incurs. This means that costs such as food, gas, electricity and general accommodation costs will not count towards the cap although these costs have been capped at £12,000.
So the real question is how many of us will actually benefit from the introduction of the care cap. For most of us it seems high unlikely to be of real help.
Contact: Coreen Ayres