We can not hide from the fact that our social care system needs reform. Such reform has been promised by various governments over the last 10 years, and after many years of waiting, steps are being taken to change the rules.
As they say “the devil is in the detail” and with just the headline “£86,000 cap on care” many families will be lulled into a false sense of security on how the new Care Fee Cap will work. The headlines are catchy and promise so much, but the reality is not so clear cut. The details will be finalised over the coming months, but here is what we know so far:
“The maximum I will spend is £86,000”
Unfortunately this is not the case. The £86,000 cap is for the cost of care only. It does not include accommodation or living costs such as food and bills. It has been widely reported that a person may spend as much as £400,000 before they hit the £86,000 care cap.
In the currently system everything is charged as one fee, but in the future, care homes will have to split how much money is actually spent caring for you, how much is spent on housing you and how much on feeding you. There is no cap on housing or food costs.
“Now I won’t have to sell my home to fund my care”
This is not accurate. The new system may focus on the deferred payment system. Once you pass away your costs will then become payable. With interest. So your house may not be sold while you are alive, but once you have passed away the sale proceeds will be used to cover any costs you incurred during your life time, plus interest.
The objective of protecting your home from costly care fees is to ensure you pass as much inheritance as possible to your beneficiaries. The new care cap does not ensure this happens and your estate can still be used to fund your care.
“This is it, the rules will not be changed now”
As we have just seen, manifesto pledges can be broken. Any rules or act of Parliament can be changed at any time. Nobody is able to predict how long the cap will stay in place or the level of the cap. Should the government change at the next election they may make other promises.
“There is nothing we can do”
Quite the opposite actually. Early and sensible planning can help you pass as much inheritance as possible to your loved ones. With the right advice and by getting your estate plan in place you can take effective and positive action now.
We are here to help you check your plan to see if it is going to work for you and your family’s future. Call us on 01777 712 733 to chat to us and get your peace of mind.