Adult social care funding: Government responds to Health and Social Care Committee report

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At the end of January 2021, the Government’s Department of Health and Social Care (DHSC) published its response to the House of Commons Health and Social Care Committee’s report on adult social care funding, which was published in October 2020.

The Government’s response confirmed its commitment to improvement of the adult social care system in 2021. In particular, the Government stated that:

  • The report on social care funding from 2019 had “made a persuasive case” for the introduction of free personal care to ensure that all basic care needs are met free at the point of need.
  • A lifetime cap on care costs was “strongly” endorsed by the Government, which would resurrect the original care cost cap plans envisaged in the Care Act 2014 (but which were dropped by the Government in 2017). The Government considers that the cap should be set at the level specified in the original report, namely £46,000.

So, is this good news for those concerned about the possibility of significant care costs for themselves or their loved ones in later life? Unfortunately, based on evidence from the past, the answer is probably not.

The first issue is that successive Governments, stretching back to the 1990s, have promised to reform the funding of social care, and ultimately what people will need to pay towards their care, without ever delivering on that promise.

The second issue is the “care cost cap” system itself. If the system proposed in 2014 is introduced, the definitions of “free personal care” and “all basic care needs” create some significant problems. The best way of illustrating this is with an example (using what can only be guesses at dates and figures):

  • It is April 2022 and the “care cost cap” system is introduced in line with the Care Act 2014.
  • At that time, Mrs Smith has been in a care home for 8 months (say, 32 weeks), at a cost of £1,500 per week, to give a total cost to her of £48,000.
  • Mrs Smith’s husband Mr Smith asks the Local Authority to assess Mrs Smith so that she can enter the “capped care cost system”. The Local Authority accept that Mrs Smith falls within the eligibility criteria, and Mr Smith looks forward to his wife receiving financial assistance immediately given her total spending in excess of the “cap”.
  • However, the Local Authority say to Mr Smith that…
    • the £48,000 spent prior to the introduction of the scheme in April 2022 will not be taken into account at all
    • going forwards, part of the £1,500 fee per week is for “accommodation costs” and so will not be taken into account towards the “care” cap
    • again going forwards, of that part of the weekly fee that does relate to “care”, the Local Authority will only take account of an amount equal to the rate that they would pay for that care, and not the actual fee paid by a private-paying self-funder
  • The Local Authority therefore state that they will only take account of £820 per week paid by Mrs Smith from now on, and so it will be more than a year (56 weeks) before the £46,000 cap is reached. By that time, Mrs Smith will have spent a total of £132,000 on her care, and will still be expected to pay her accommodation costs and private care rate excess thereafter.

As is clear from the above, “the devil is in the detail” of any legislation that might be introduced, and in the meantime careful planning to protect assets from the potential liability of care home fees remains appropriate.