Under major changes to the funding of adult social care in England, recommended today by the Commission on Funding of Care and Support in its final report Fairer Care Funding, costs would be capped and the means-tested threshold increased.
Instead of individuals’ paying all their care costs until they have assets of less than £23,250, as under the current system, the proposals would mean that those with high care costs would only pay up to a set amount and after that their care costs would be paid for by the State.
The independent commission, set up by the Government last July, was asked to recommend a fair and sustainable funding system for adult social care in England.
Among the recommendations in the report are:
• Individuals’ lifetime contributions towards their social care costs – which are currently potentially unlimited – should be capped. After the cap is reached, individuals would be eligible for full state support. This cap should be between £25,000 and £50,000. We consider that £35,000 is the most appropriate and fair figure;
• The means-tested threshold, above which people are liable for their full care costs, should be increased from £23,250 to £100,000;
• National eligibility criteria and portable assessments should be introduced to ensure greater consistency; and
• All those who enter adulthood with a care and support need should be eligible for free state support immediately rather than being subjected to a means test.
The Commission estimates that its proposals – based on a cap of £35,000 – would cost the State around £1.7billion.
Andrew Dilnot, chair of the Commission, said:
“The issue of funding for adult social care has been ignored for too long. We should be celebrating the fact we are living longer and that younger people with disabilities are leading more independent lives than ever before. But instead we talk about the ‘burden of ageing’ and individuals are living in fear, worrying about meeting their care costs.
“The current system is confusing, unfair and unsustainable. People can’t protect themselves against the risk of very high care costs and risk losing all their assets, including their house This problem will only get worse if left as it is, with the most vulnerable in our society being the ones to suffer.
“Under our proposed system everybody who gets free support from the state now will continue to do so and everybody else would be better off. Putting a limit on the maximum lifetime costs people may face will allow them to plan ahead for how they wish to meet these costs. By protecting a larger amount of people’s assets they need no longer fear losing everything.”
In the next twenty years, the number of people aged 85 and over in England is projected to double to 2.4 million.
The current adult social care funding system, conceived in 1948, means that those with assets of more than £23,250 are liable for the full cost of their social care needs. A quarter of 65 year olds today can expect to face care costs of over £50,000 and for one in 10 it will be more than £100,000.
Given the uncertainty that people currently face over their future care costs, there are limited financial products on the market to support them. This creates great uncertainty and people worry about the future. Capping individuals’ contributions would open a new space for financial products based around insurance, pension, housing assets or savings-based schemes.
The Commission believes that this combination of a cap and the higher means-tested threshold would ensure that no-one going into residential care would have to spend more than 30 per cent of their assets on their care costs. Under the current system, at the extreme, people face losing over 90 per cent of their assets.
Among the other recommendations in today’s report are:
• People should contribute a standard amount to cover their general living costs, like food and accommodation, in residential care;
• Universal disability benefits should continue, but Attendance Allowance should be rebranded so people understand its purpose;
• An awareness campaign should be launched to help people understand the system and engage with it;
• Carers should be supported by improved assessments which aim to ensure that the impact on the carer is manageable and sustainable; and
• The deferred payment offer should be extended so it is available to everyone, wherever they live.
In addition to funding the proposed reforms, the Commission said that additional public funding for the current means-tested system is urgently required.