What is the future for care home fees?
Government statistics suggest that around one in ten people will have care costs of over £100,000. These costs are manageable for the wealthiest people, while the poorest are funded by the Local Authority, and so it is those with modest assets that are at risk of having to spend most of their wealth on care costs.
To deal with this problem, on coming into Government, the Coalition established a Commission, chaired by Andrew Dilnot, to advise on how the law should be changed. The Dilnot Report proposed that there should be a cap on lifetime care costs, and that £35,000 would be an “appropriate and fair figure” for the cap. Recent reports in the press have suggested that the Government is set to introduce the cap, but at £75,000 per person.
Some of the issues with the proposed cap are as follows:
l Paying £75,000 for a couple is of course £150,000, which is still a considerable sum of money
l Only care costs up to the local authority rate are counted towards the cap, yet a self-funder is highly unlikely to be able to obtain care at the local authority rate. As a result, the actual cost of care up to the date set by the local authority when the cap is deemed to have been met is highly likely to exceed £75,000 (or £150,000 for a couple).
l The cost of care excludes general living costs (ie accommodation costs), which figure is likely to be set at a figure of no less, and possibly more, than £10,000 per person per year.
l The Government suggested in July 2012, that those already in residential care will not have any part of the fees they have paid towards their care up to that point taken into account towards the cap.
It is possible to take action to protect assets from care home fees, rather than relying on any possible change in the law.