BEFORE retiring for the Summer Recess the Government announced that it would delay some of the initiatives set out in last year’s Care Act that were due to come into effect on 1 April next year. This month we explain how the current system of funding acts as a form of tax on people who have to arrange and pay for their own care. Andrew Carrigan, Ashfords

Somerset County Gazette:

The Government has delayed the introduction of changes to the funding of Social Care that featured heavily in the pre-election campaign. The ‘flagship’ policy was the introduction of an upper limit anyone would have to pay towards their own care.

However, and as explained in a previous Care Matters feature, the Care Cap was never what it seemed and would have had limited beneficial effects. Bearing in mind the burden administering the system would have placed on Local Authorities it is perhaps understandable that its introduction has been delayed.

Of more immediate concern are two changes that were to accompany the Care Cap. The means test that is applied to people in need of ‘social care’ was to be altered.

You would have been able to hold more savings before having to contribute to the cost of your care. The point at which you would have to meet all your care costs would also have increased.

It is estimated that these changes would have led to 23,000 people with modest savings receiving a greater contribution towards their care costs.

People who required care would have been able to ask the Local Authority to arrange that support for them. At the moment anyone with assets worth more than £23,250 must arrange and pay for their own care. However, in Somerset, as in most other counties, the Local Authority uses the fact that it is a major purchaser of care to negotiate lower rates than you or I could obtain.

To protect the public purse, and given increased demand and the squeeze on budgets, the Local Authority negotiates hard. That is what we would expect, but that commercial pressure has consequences.

One effect is that people who arrange their own care pay more for the same services than is charged to care for someone funded by the Local Authority.

In effect the care that is arranged by the state is funded, in part, by people who pay for their own care. That support is not through the tax system but through the price that selffunders pay for an hour of care provided in their home or the cost of a week in residential care.

It is not clear what the value of this re-distribution of wealth is in cash terms, but overall the Government thinks that introducing the planned changes would cost Local Authorities an extra £6billion in the next 5 years.

The care sector is also dealing with the demands of meeting the new minimum wage of £9 per hour by 2020 and lifting the quality of care provision generally.

If the bias against self-funders persists there is a risk that the differential will increase and that the majority of home owners who go into care will be left with just £14,250 when they die.

THE Changes that are delayed until at least 2020:
• The introduction of the £72,000 Care Cap.
• The right for people funding their own care to have it arranged for them by the Local Authority.
• The increase in the point at which a person is completely self-funding from £23,250 to £27,000 or £118,000 if you own your home.
• The increase in the point at which a person’s care costs will be met by the state from £14,250 to £17,000.
Health and Welfare Powers of Attorney will have added significance following the proposed improved care guidelines.
Read more here -

Ashfords LLP’s Trusts and Estates Team considers the Inheritance (Provision for Family and Dependants) Act 1975 and the recent ruling by the Court of Appeal in the case of IIott v Mitson [2015] EWCA Civ 797.
Read more here -

You can contact Andrew via email: