Thank you for contacting me about the Government's social care reform plans and the care cap. I support the Government’s commitment to deal with difficult decisions and tackle longstanding problems within our social care system. This historic plan for adult social care will protect individuals and families from unpredictable and potentially catastrophic care costs.
From October 2023, no eligible person starting adult social care will have to pay more than £86,000 for personal care over their lifetime. To be clear, the cap is not a target to be hit, but a backstop protection to ensure people have certainty and avoid catastrophic costs. The reformed means test, which is the best way to ensure care is affordable, will increase the threshold above which people must meet the full cost of their care to £100,000. This is more than four times the current limit of £23,250, and the number of people receiving state support in the social care system will increase from around half to two thirds.
In designing these reforms, the priority has been the creating a more generous means testing system, which benefits those with low to moderate means. The nature of the means test will dramatically reduce the amount that some people will have to spend on care. For example, someone who has £100,000 of assets would need to draw on care and support in a residential home for about ten years to spend the same amount as someone who entirely self-funds. Older adults have around a one-in-three chance of living in a residential home for three years and a one in 50 chance of doing so for ten years.
Only the amount that an individual contributes towards their personal care will count towards the cap, which ensures that those living in different parts of the country, but contributing the same amount, do not progress towards the cap at different rates because of differences in amounts paid by their local authorities.
Fewer people will be unable to pay for social care without selling their home under the reforms to the social care charging system compared to the existing system. These reforms will complement the existing system which ensures that nobody will have to sell their home to pay for their care in their lifetime. People are able to take out a Deferred Payment Agreement so that payments can be deducted from their estate after they die. And if someone or their spouse lives in their home, they will not be forced to sell it to pay for care.
The new social care reforms are clear, fair and reduce complexity.