The white paper on social care in England and new cap on care fees brings more confusion to an already confused system. It’s unlikely to save many people any money and does nothing to alleviate the immediate crisis facing social care.
The government announced a cap on the amount that people have to pay for the cost of care. It is proposed that from October 2023, no one will pay more than £86,000 towards the costs of their own care during their lifetime.
The lifetime cap of £86,000 only applies to care costs and people will still be expected to contribute towards their accommodation and daily living costs. Contributions that have been paid before October 2023 will also be excluded.
The current means-tested cap provides that those with assets and savings less that £14,250 do not have to pay for their care. The new system provides the lower threshold is increased to £20,000. In addition, the upper capital limit will rise to £100,000.
This means people above the upper capital limit (£100,000) will have to pay full cost as they are a self-funder. People with assets between the capital limits will contribute on a sliding scale depending on their assets. And those below the lower limit (£20,000) will no longer contribute from their assets.
There may be a positive difference for a very limited number of people but certainly not poorer pensioners. It’s clear the safety net for individuals has some significant holes in it. None of us can rely on it and each of us should make both a health and a wealth plan. It’s time we stopped thinking of planning for the future as something we do in later life.
When thinking about protecting your home when it comes to paying for the cost of care, there are a few things to consider:
1. If you need to move into a care home, you’ll usually have a financial assessment to work out how much you’ll need to pay yourself. If you own your house and your spouse, partner or civil partner is still living there then a ‘property disregard’ could apply which means your home won’t be used to fund care costs.
2. However, the local authority will take income, including pensions, into account when they decide how much people will pay towards their own care. This may reduce the household income available to the spouse/partner who continues to live in the property.
3. In most cases, couples tend to own a property as joint tenants so that when one partner dies the property automatically passes to the survivor. One of the primary reasons people change this is to ensure their 50% share of the property passes to their children, rather than it automatically passing to a surviving spouse / partner (and consequently the whole value of the property being taken into account for the costs of care of the surviving partner / spouse). You can sever the joint tenancy over your property by written notice and then updating the ownership position with the Land Registry. You should then make a Will to ensure that your share of the property passes in accordance with your wishes. However, as an alternative, you may consider your home as an investment to fund your care. This would give you a greater ability to choose where you would like to be cared for (close to loved ones and relatives perhaps) and how (any preferences you may have that would incur a greater care cost).
How can MLP help me?
Each individual’s circumstances are very different, so we’d always recommend speaking to a specialist solicitor.
MLP Law have specialist solicitors who can advise clients on protecting assets and planning for your future. We have solicitors who are members of SFE (Solicitors for Elderly), the membership organisation for specialist solicitors who support older and vulnerable people.
Our offices are open for covid-19 safe appointments, alternatively we can discuss your instructions via telephone, video call or email.
Contact Details for Wills, Trusts and Probate Team: 0161 9269 969 or WTP@mlplaw.co.uk