Delay to the Cap on Care Fees Announced
Government plan for a cap on care fees will not now come into force until 2020.
The cap on care fees was originally going to be introduced in April 2016.
The idea behind the proposal for the cap on care fees is to limit the amount an individual has to pay for their care in old age.
Currently, the cost of paying for care must be paid for by anyone with assets over £23,250.
Anyone needing care support either in their own home or in a residential care home is means tested to determine how much of the cost they will have to pay.
If you receive care in your own home your savings and any stocks and shares will have to be taken into account. If you need care in a residential home the value of your property is also going to be taken into account, unless your spouse lives in your property.
There are approximately 4 million people in the country with care needs but only about 240,000 people aged over 65 years who live in residential or nursing homes in the UK get help with their fees.
How will the cap on care fees work?
When the cap on care fee is introduced in 2020 it will mean that if you are over 65 years the amount you will have to pay for your care will be capped at £72,000 but for this to apply your care needs will have to be assessed as very high.
You will be entitled to care support at a standard rate set by the local authority. At the moment a flat rate of £230 per week is proposed. If you live in residential care you will still have to pay for your food and lodgings and other extras.
There will be an opportunity to get some help towards care fees once your assets drop below £118,000. This figure will include the value of your home.
When your assets fall below the £118,000 threshold the local authority will assess your finances to calculate how much it will pay towards your care. If you receive care in your own home the threshold is much lower at £27,000. Anyone with a good private or occupational pension will remain responsible for their own care costs.
Deferred Payment Scheme
From April 2015 all local authorities are required to provide a deferred payment scheme for care costs.
A charge is registered against your property by the council and when the property is eventually sold the council will recover the amount it has expended on your care costs from the sale proceeds.
Local Authorities can charge interest on the debt at a rate of 2.65%. However, Councils are only obliged to make the scheme available to people who have assets (excluding the value of their home) below £23,250. They have the discretion to offer it to people with assets above that threshold.
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