The Care Act 2014: funding and payment of services and fees
We have an ageing population and it is likely that most of us will need help as we get older and live longer. Who will pay for this help?
The Care Act 2014
The Care Act 2014 came into force on 1st October 2014 and will be implemented in phases over the next 2 years. The Act is designed to simplify care law by consolidating several acts of Parliament.
Some of the main changes to care home funding are as follows:
Local Authority Duties
From April 2015, you will have the right to a free assessment by your local Council to find out what your care needs are (if any). These are needs which your Council says must be met. Following this, your Council will determine who will pay to meet your needs.
Who pays for meeting your needs?
Unlike free healthcare on the NHS, social care needs are subject to a means test.
Currently, you pay for care home fees if you have more than £23,250 in capital.
What’s new? From April 2016:
- you will not have to use your savings to pay for care if you have less than £17,000 (capital) although you may have to pay for some of the costs of your care out of your income;
- if you have more than £17,000 but less than £118,000 you will need to contribute towards your fees;
- if you have more than £118,000 you will need to pay all of your care home fees, subject to a cap.
The Care Cap
However, there will be a limit on how much you pay towards meeting your needs during your lifetime.
Currently, you have to pay for all of your care costs until your savings are below £14,250.
From April 2016, a cap of around £72,000 will be introduced on what you are expected to pay towards the cost of your care.
The cap only applies to ‘eligible’ needs. If your care needs are deemed not to be eligible (i.e. not on a list of approved needs), nothing you spend on care will count towards the care cap.
How will this work?
If you qualify for social care support, you will be set up with a care account. The amount spent on meeting your eligible care needs at the Council’s standard rates will be recorded. Once you reach the cap, the Council will be responsible for taking over the full cost of your care to ensure that your assessed eligible needs are met.
There are expenses excluded from the cap, such as daily living costs (food and lighting) and more expensive care.
The law is still subject to amendment as new regulations will deal with the detail so watch this space.
We have not touched on restrictions on estate planning steps you can take. If you require advice now, please get in with Susan Stone or Tamasine Hankey.