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Care home funding: will the proposed changes affect you?

Health and social care issues such as care home funding are rarely out of the political spotlight, in part because the current system is unremittingly complex and unsustainable, and in part because as we all grow older the issues become more pressing.

Care home funding costs UK

As it stands, where an individual has assets over £23,250, they must fund their care costs, whether that care is provided in domestic, nursing or residential care home settings. Given that the average care home funding equates to some £600 per week, assets are quickly dissipated for future generations and many are forced to sell their homes or even have an escalating charge placed against them to be settled out of their estate when they die or when the property is sold, whichever happens sooner.

Care costs cap

With this in mind, Health Secretary Jeremy Hunt, in his quest to bring “greater certainty, fairness and peace of mind”to the adult social care dimension, has proposed to cap the amount anyone will have to pay in their lifetime at £75,000. Furthermore, it is also proposed that the local authority upper capital threshold limit of £23,250 will increase to £123,000. While arguably better than no cap at all, these proposals will not come into force until 2019.

It is claimed that the measures will be funded by “freezing” the Inheritance Tax (IHT) limit at £325,000 until 2018. Unfortunately for anyone near or over the IHT limits, Chancellor of the Exchequer George Osborne’s pledge to make a modest increase to IHT of 1% from 2015/2016 and the pre-election Conservative pledge to increase the IHT limit to £1 million have now been abandoned. This makes it even more important to ensure that wills are up to date and IHT efficient.

Care Quality Commission

The Health Secretary’s funding proposals really only address an inherent fear of people having to sell their homes to fund long-term care. They do not address falling care home standards. Many homes fail to meet the Care Quality Commission national minimum standards and, as a consequence, the oldest and sickest members of society are at risk. Arguably, this should be a far more pressing concern.

While the current debate dictates that local authorities should be more innovative in making good funding shortfalls, it is clear that they operate within tight budgetary constraints. Although this may impact on failing care standards, it is important to note that a local authority has a duty to assess an individual’s care needs, if it is reasonably apparent that such an individual is in need of community care services. The financial assessment and subsequent consideration of assets (and therefore contribution to costs) come after.

NHS care funding

Indeed, if it is apparent that the individual has a health need, then the NHS can be invited to join in the assessment and, as a consequence, that individual may be eligible for NHS funding. If this is the case, then the local authority means-test is irrelevant, since the NHS is free at the point of delivery and cannot charge for care given to someone who has primary health needs.

Fees for care home funding and access to assessments remain complex areas. For further information or advice please contact our Private Client Services team or call us on 0117 904 6000.

Posted on Feb 20th, 2013 by Lyons Davidson

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