Kelly’s ‘Know-how’ – September 2021 edition
Navigating later life care
Welcome to the September edition of my ‘Know-How’ blog. This month, I’d like to discuss a topic that has recently been in the news headlines: the proposed social care reform.
As a reminder, this is the current social care position in England:
- There is a £23,250 capital means test ceiling, above which all care costs must be met by the individual – the self-funding route.
- For those with wealth between £14,250 and £23,250, there is a contribution from income based on an income means test. In addition, there is a ‘tariff income’ contribution based on capital between £14,250 and £23,250 levied at the rate of £1 per week per £250 of capital (or part thereof) above £14,250 (equivalent to 20.8%).
- Only if capital wealth is below £14,250 does the income means-tested element alone apply.
- The value of an individual’s home is generally included in the capital means-test unless it continues to be occupied by a dependent, partner or relative aged at least 60.
- NHS-funded Nursing Care (FNC) is paid direct to the care/nursing home to cover the cost of registered nursing care at a rate of £187.60 a week. No means test applies to this. Only in very limited circumstances will all costs be met under the NHS Continuing Healthcare (CHC) provisions.
On Tuesday 7th September 2021, the Prime Minister announced the following proposed changes for those entering care from October 2023:
- The ‘full fees’ capital means test limit will rise to £100,000.
- ‘Tariff income’ will be levied if capital exceeds £20,000. The Government says that the tariff will be ‘no more than 20%’, which suggests little if any change from the current £1/£250 basis.
- Only income means tested payments will apply for those with capital below £20,000.
- There will be an overall cap on the amount any individual has to pay for care of £86,000. The figure only covers personal care costs, not residential (aka ‘hotel’ costs).
What does this change potentially mean to you or your loved ones entering care?
Many people might think that the maximum fee they pay for care is capped at £86,000. However, there is a caveat there, only the cost of the personal care element counts towards the lifetime cap.
All other costs (residential, meals…) do not count towards the cap. This means that, for many, the total cost toward care fee will be higher, possibly considerably so.
Also, once the cap has been met, it is at the discretion of the local authority to pay for ‘adequate’ care. This might not be the care home that you are currently staying or want to stay.
Clearly, we will have to wait for further clarification on the nitty gritty details. However, we can see that there is an increasing need for advice in this area as matters get more complicated.
This can be a very emotional time, for the person needing care, and friends and relatives alike, and we want to ensure that our valued clients and their loved ones can benefit from in-depth knowledge and support in this area.
SOLLA (Society of Later Life Advisers)
I am pleased to announce that I am an associate member of SOLLA, which is a not-for-profit organisation that aims to ensure that people are better informed about the financial issues of later life and can find a fully accredited adviser quickly and easily.
This means that you have direct access to specialist knowledge, expertise and advice in relation to later life care, whether you need help now for older relatives, or want to plan ahead for yourself or a family member or friend, to avoid any unnecessary surprises in the future.
As always, I am here to help you and your loved ones – please get in touch if you have any questions, or if you’d like to arrange a meeting to discuss any aspect of later life care costs and planning. And if there is anyone you know who would benefit from some help in this area, please do pass on our details, or with their permission, pass their details to us, and we will do what we can to help.
Until next time, stay safe and well,