Funding Care in Later Life

Funding Care in Later Life


Under the changes proposed in the Care Act 2014, which received the Royal Assent in May 2014 and which came into effect in April 2016, the funding of elderly care has changed significantly. There is a factsheet available from the government website.

One of the perceived benefits under the new system is that care costs are to be subject to a 'lifetime cap', initially to be set at £72,000. This is not as beneficial as it may seem, however, because the cap does not include the 'board and lodging' element of the care costs, which currently normally exceeds £1,000 per month. Furthermore, the legislation provides that these costs may be varied in line with average earnings.

Provisional figures (based on estimated values as at April 2016) suggest that care costs will be fully met by the elderly person where assets (which will include the value of any property owned) exceed £118,000, or £23,250 if no property is owned.

Where the person being cared for has assets with a value of less than £14,250, their care costs will be fully met by the state unless they have sufficient income to pay them. Care costs for medical, as opposed to 'social' needs are met by the NHS. However, in practice what is regarded as 'medical' is quite limited.

Where a property is owned but cannot be sold, the council will, if necessary, take a legal charge over it, so that when it is eventually sold, the council's costs will be recouped. It is a common misconception that gifting away a property will mean it cannot be taken into account as an 'asset' for assessing care costs if the time between the gift and the need to go into care is significant. This is not strictly the case. However, a property occupied by a dependant over the age of 60 cannot be counted as an 'asset' for this purpose.

The Government has launched a consultation seeking views on draft regulations and guidance on the care and support reforms. The consultation period closed on 31 March 2015. A series of factsheets have been published by the Government to assist care providers and thos with relatives needing care to understand the new provisions.

Age UK also has a useful series of factsheets, including one on funding residential care.