Government changes care cap rules forcing poorest to pay more for care homes

The government’s cap on care costs has been accused by the Labour Party of being “an even bigger con than we initially thought”, after it finally published details of the reforms, revealing the poorest will still have to sell their houses to pay for care.

The government announced its plans to reform social care back in September saying it would cap costs for personal care at £86,000 from 2023, using a National Insurance hike of 1.25 per cent to fund health and social care over the next three years.

It said living costs such as food and accommodation in the care home would not count towards the limit.

Boris Johnson promised there would be subsidised care costs for people owning between £20,000 and £100,000 in assets and these would be based on a means test.

However the government has now said it is bringing in an amendment meaning the £86,000 care cap will only include what the person privately contributes and nothing from the state.

The Government said this would make sure “people do not reach the cap at an artificially faster rate than what they contribute”.

In 2011, the Dilnot Commission proposed including the person's contributions as well as whatever the local authority spent on their care towards the cap.

'Poorest pensioners will have to pay even more'

In response, Labour’s Shadow Care Minister Liz Kendall said: “This small print, sneaked out today under a cloud of Tory sleaze, shows Boris Johnson’s so-called cap on care costs is an even bigger con than we initially thought.

“It has now been revealed that the poorest pensioners will have to pay even more, something Andrew Dilnot – who proposed the cap – explicitly ruled out because it was so unfair.”

A Department of Health and Social Care spokeswoman said: “We are committed to delivering world-leading social care across the country and are investing an additional £5.4bn over three years, which will allow us to begin a comprehensive adult social care reform programme.

“These charging reforms will mean everyone is better off.

“Compared to the current system more people will be supported with their social care costs, have greater certainty over what they need to pay and receive higher quality care.”

Charles Tallack, assistant director of the REAL Centre at the Health Foundation, called the changes “poorly conceived” and “a step in the wrong direction”. He added: “The Government’s proposed amendments to the Care Act mean that these reforms will no longer protect those with lower assets from catastrophic costs.

“The change would mean that those with wealth of less than £106,000 would be exposed to maximum care costs of almost twice the amount as under the Care Act.

"The Dilnot Commission considered this approach in 2011 and rejected it as unfair. The changes seem motivated by a desire to save money - but to do so by taking protection away from poorer homeowners.”

Under the current system someone with wealth of £200,000 can lose 93 per cent of their wealth. Under the Care Act system and the Government’s proposals this is reduced to 43 per cent (£86,000 of £200,000).

'This feels like completely the wrong policy choice'

Caroline Abrahams, charity director at Age UK said: “The change the government has announced makes the overall scheme a lot less helpful to older people with modest assets than anyone had expected.

“It waters down Sir Andrew Dilnot's original proposal to save the government some money, but at the cost of protecting the finances of older home owners who are not terribly affluent if they need care for a long time.

"This feels like completely the wrong policy choice and we are extremely disappointed that the government has made it - and that it is only announcing it now, rather than two months ago when the Prime Minister set out his plan.

"Unfortunately, its impact is such that it is more than a mere 'tweak'."

When this change is factored in it becomes clear that the cap will disproportionately benefit those living in the South, rather than the North, where house prices are that much lower, flying in the face of the government's 'levelling up' agenda, according to Ms Abrahams.

GMB Union described the government’s new social care cap as “picking the pockets of the poorest pensioners”.

Sally Warren, director of policy at The King’s Fund, called the changes “disappointing” and said: “The government was brave in raising taxes to fund the long-overdue reform of social care but, having taken two steps forward, has now taken one step back.”

MPs will vote on whether to support the plans next week.