25 February 2013

Long Term Care - The Proposals

The Government's aim with the recent proposal has been (it says) to bring greater peace of mind to people in capping the cost of long term care. The proposal is that an individual's costs will be "capped" at £75,000 from 2017.

In addition, the current means-tested level of assets at £23,250 (above which you pay for yourself) is proposed to increase to £123,000. However, between that amount and the lower limit of £17,500 the local authority will use someone's income level to increase their notional capital - potentially putting it over the limit and outside of local authority funding.

A further "however" is that the cap only covers "personal social care" and doesn't cover living expenses, or any other expenses above what the local authority would normally pay. In other words it's not much of a cap at all. So things are still not at all clear.

It's a costly area, whether individuals pay or the Government pays. And the current proposal to provide part of the funding will come by continuing the freeze on the Inheritance Tax threshold at £325,000 for another three years beyond the current freeze which ends in 2015.

All in all there is a long way to go before there is clarity, and even further before there is fairness. For individuals the best approach, as ever, is to plan ahead with professional advice.

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