For many years, the way people are charged for social care has been widely seen as unfair.

For some people, the costs of social care, such as carers coming to the house or a move into a care home, can swallow up nearly all the assets they have built up over their lifetime.

People have objected to this partly because it means that they cannot leave anything to their children, but also because it only happens because they need a particular type of care. Because the medical options available for treating something like dementia are few, someone with it may need little NHS treatment but a lot of social care, which in most cases they will be charged for.

But if you develop an illness such as cancer, that can be treated by the NHS, then your care is free. This is widely regarded as deeply unfair.

The current adult social care system is described in our information leaflet.

The new system announced by the Prime Minister this week will change this – but only for some people, and not immediately. This article sets out what we know about how the system will change. The changes will happen from October 2023 onward.

What’s going to change

There will be two changes to how charges for social care are calculated. You may see these referred to as a ‘floor’ and a ‘cap’. We’ll start with the floor.

A new floor

Under the new system, if you have assets worth over £100,000 you will have to pay in full for social care. Once your assets are worth less than £100,000, the state will pay for some of the costs. In practice, it will be your local authority that is responsible for this. This is how the current system works, but your assets can drop as low as £23,250 before the state starts paying. The change will, therefore, mean that many people can get access to some public funding much sooner than you can nowadays.

Once your assets fall to £20,000, you will not be charged for social care at all, and your local authority will pay in full. Again, this is like the current system, but the current amount is lower, at £14,000. In this way, the new system, is said to ‘raise the floor’ to protect people’s assets.

In both cases, if you own your home and still need to live in it, it will not be counted as part of your assets to calculate the floor.

Introduction of a cap on costs

The second major change is the ‘cap’. Unlike the ‘floor’, this doesn’t just make the existing system a bit more generous: it is a new rule, that is not currently in place at all.

It means the total you will pay in charges for social care will not go above the level of the cap, which has been set at £86,000. So a tally will be kept of the fees you pay, and when they hit a total of £86,000 your local authority will step in and pay charges from that point onward.

What it could mean for you

Of course, some people may hit the ‘floor’, with their assets hitting the minimum level before they have paid the total cap of £86,000 in charges. Others may reach the £86,000 cap but still have assets above the level of the ‘floor’. Either way, whichever you hit first, that’s when you will stop paying for social care and the local authority will step in.

In practice, there are likely to be a lot of detailed complications to the system. We already know of a few things that make the picture more complicated than it first appears.

Hotel costs

Firstly, these provisions only cover the cost of care. If you move into a residential home, these new rules will cover charges for the care provided in the home – that is, the help with day to day living. But they will not cover ordinary living expenses: as an adult, you are still responsible for providing yourself with food and shelter, and these costs will not be covered by the new rules.

So even once you have stopped paying for care, you will still have to pay for board and lodging in your residential home.

How the cap is counted

Another complication is what gets counted towards the ‘cap’. When the idea was first proposed, ten years ago, the Coalition Government at the time said it would implement it and did a lot of work on how to operate the new scheme.

The plans were scrapped, but the amount that counted towards each person’s cap was the amount that their local authority would pay for a given amount of care. So, if a local authority can get an amount of care for £100, but the individual paid £150 for the same amount, only £100 would be counted towards the cap.

This is quite a common situation, where people who pay for themselves (‘self-funders’) have to pay higher rates than local authorities pay for the people whose care they fund. It means that by the time you officially hit the cap, the amount you’ll have paid is actually much higher than the official level of the cap.

It’s not clear whether the new system will work in the same way. The Government’s proposals suggest that people will be able to ask the local authority to arrange their care, meaning they will get it at local authority prices, and therefore pay at local authority rates. We will have to see how this works in practice to know whether or not it is a good option.

There will be a consultation on the detail of how the new charging system will work, starting this October. There will also be a further white paper on reforming how social care works, and how it can be integrated better with the NHS, later this year.

We will be engaging with the Government to make sure that the new system works as well as possible for everyone who needs social care. We will also post information on our website as we receive it about changes to how we are expected to pay for social care.

Photo by Nathan Anderson on Unsplash