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Latest News Breaking down the social care cost cap in England

Breaking down the social care cost cap in England

Social care cost cap in England

The Prime Minister announced long-awaited changes to the future funding of social care in England at the start of September. As part of this announcement, we were advised that there would be a new Health and Social Care Levy, which in effect adds 1.25 percentage points to the National Insurance (NI) contributions for employees, employers and the self-employed from April 2022.

Two key features, starting in October 2023, were:

  • Higher capital limits for means testing. The upper limit will be rising from £23,250 to £100,000, above this you must pay for all of your care. The lower limit is also rising from £14,250 to £20,000, below this limit your care is fully funded by the local authority.
  • The cap on personal care costs paid will be £86,000. Above this cap you would not have to make any further contributions to the cost of your care.

Following this announcement, in November the government gave some more information on how the cap will work and it was generally believed to be less generous than initially thought.

  • The cap will only apply to care Living costs, such as for food and accommodation, would need to be paid for by the resident and are assumed to be around £200 per week.
  • Top-up fees for improved facilities are disregarded. Costs are tracked with the local authority cost only.
  • Most importantly, the cap is for care payments made by you only. Therefore, the total cost of care paid by you and the local authority is not included, as had been assumed.

The last point means that if you have more than £106,000 in capital, you would be required to pay up to the cap to meet the cost of your care. Under this, you would pay until you reach the £20,000 lower threshold.

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