The prospect of losing your home to pay for long term care can be terrifying – and one in 10 adults faces a care bill of over £100,000. This situation also arises at a time of huge personal transition and often great distress, such as moving into a care home. The impact on the whole family is immense.
The Dilnot Commission was set up in 2010 to look at alternative ways of funding long term care – and to address the problem of people losing their homes and their entire assets to pay for this care.
The proposals that resulted from this Commission included a higher means-test threshold, so that state help would kick in for more people, and a cap on the total amount anyone would have to pay for care.
Although a cap on care fees and a higher means test threshold is at least one way of moving forward, and they do to a degree address the problem of people losing their entire personal assets to pay for care, many people seem sceptical that they’ll make any meaningful difference.
In 2013 the coaltion government announced a £75,000 cap on the care fees anyone has to pay, and an increase in the means test threshold to £123,000. But now the goalposts have moved and this will not take effect until 2020.
The current means test threshold is £23,250 (in England).
It is likely to make little difference to many elderly people needing care, and many will still have to sell their homes to release cash for care fees.
Plus, although the Dilnot proposals have certainly prompted decision makers to look at new ways of funding care, they do not address the problem of inadequate standards of care for elderly people, nor the pay structures and morale in the industry. Addressing these two critical issues may hold more potential for reducing the overall national cost of care.
With the new limits not coming into force until 2020 – and even then the figures could change – elderly people and their families will still have little, if any, short-term protection against the costs of long term care.
Plus, the cap on fees applies only to the ‘care’ element of the overall care fees, with all other costs of being in a care home still having to be funded by the individual needing care.
However, what few press reports mention is that this is all to do with social care – and that healthcare and nursing care is different. Where a person’s care needs are primarily health needs, the person should be assessed for NHS Continuing Healthcare funding before anyone asks about their money.
There are many people in full time care who need healthcare and nursing care – and who are being wrongly charged for that care, because the various health and social care authorities have told them they ‘just’ need social care. This is perhaps the greatest scandal.
It is only ‘social’ care that is means tested – and it’s this social care that the cap on care fees refers to.
Anyone needing full time care for health reasons should first be assessed for 100% NHS funding. NHS Continuing Healthcare is not means tested and so it does not depend on your savings or assets – it depends only on your health and care needs. Everyone receiving full time care and who has health needs (whether that’s at home or in a care home) should be assessed for it.
There is also the tax-free, non-means tested benefit known as Funded Nursing Care, which covers an element of nursing care. Again, this is provided by the NHS.
So, remember that the cap on care fees applies to social care only. NHS Continuing Healthcare funding covers 100% of the costs of being in a care home or receiving full time care at home.
Regardless of what funding you may or may not receive though, it’s still important to plan ahead and review your financial situation in advance, as you can’t necessarily predict what kind of care you may need or what funding will be available in the future. It may be possible to protect some of your money from being taken to pay for care.
It’s important to take good independent financial advice about this. Always make sure, though, that any financial adviser you use not only understands care fees and local authority funding, but also understands that long term care for people whose primary need is a health need is funded by the NHS.
If you have a relative needing full time care, read more about paying care fees.