7 November 2013

Will the State Pay My Care Costs?

The funding of social care (in other words long term care, typically in later life) is undergoing changes at the moment.

The Care Bill is still going through Parliament, but the key message is that someone is very likely to have to pay more than the headline figure of £72,000, so it's worth planning ahead for this.

Here's my bullet point summary of the current situation.
  • Currently, the State will help cover the costs of care and living costs if an individual's assets are below £23,250 (in England). Above that, you're on your own.
  • In future (probably from 2015), you will be eligible for assistance if your total assets (including any property owned on your own) are below £118,000
  • If assets are above that there is a cap on what you will need to pay of £72,000, BUT that only caps the cost of care not the cost of daily life (called "hotel costs") - you could be required to pay up to £12,000 per year towards that
  • In addition, if the local authority rate for the area is lower than the actual cost, then only the lower amount counts towards the cap. That means you have to go on paying for longer because it takes longer to reach the cap of £72,000.
  • Once you have reached the cap, the Government pay the cost of care, but only up to the local authority's limit, and only the care costs not the "hotel costs"
  • If total assets including your house exceeds £118,000 you won't have to sell the house to raise the cash, but the local authority will put a charge on the property which will be recouped from the estate on the death of the resident. Interest rolls up to increase the debt further. These are called the "deferred payment arrangements".
So as ever, don't rely on the Government to look after you if you can possibly avoid it. Plan ahead.

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