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Conservative Party offers new solution to elderly care funding

Thursday, 18 May, 2017

The Conservative Party election manifesto, published today (18 May 2017), puts forward a new plan for funding long-term care of the elderly in England and Wales.

Paying for long-term care for the elderly has been a contentious issue for a number of years. At the moment, elderly people who need to go into long-term residential care are means-tested by their local authority. If their assets are less than GBP23,000 the local authority pays for their care. If their assets are over that threshold, the person must pay a contribution. If they cannot pay that contribution in cash, their property can be sold, or a charge put on it, to recover the costs of their care. With care home costs typically averaging GBP40,000 a year, the persons' assets can rapidly be absorbed by care costs.

Similar means-testing rules apply to domiciliary care delivered at the patient's home depending, in part, on the local authority's budget.

The Conservative Party's original plan, first proposed in an independent report in 2010, was the introduction of a lifetime cap on care home costs. After some delay, the then coalition government accepted the suggestion, first setting the cap at GBP35,000 and later raising it to GBP72,000. In February 2015, the government published draft regulations to implement the cap, but it was never brought into force, and by the time of the 2016 general election it had been formally dropped.

The Conservative Party's new plan contains no cap, but remains close to the existing system of means-testing. A person's contribution to the costs of care – whether residential or domiciliary – will be determined by a single threshold of GBP100,000. Once their net assets fall below that level, their care will be paid for by the state.

'The value of the family home will be taken into account along with other assets and income, whether care is provided at home, or in a residential or nursing care home', says the manifesto. 'We will introduce a single capital floor, set at GBP100,000, more than four times the current means test threshold. This will ensure that, no matter how large the cost of care turns out to be, people will always retain at least GBP100,000 of their savings and assets, including value in the family home.'

Payments can still be deferred until death. 'We will extend the current freedom to defer payments for residential care to those receiving care at home, so no-one will have to sell their home in their lifetime to pay for care', the manifesto says.

  • The manifesto also promises 'tougher regulation of tax advisory firms [and] a more proactive approach to transparency and misuse of trusts'. However, this may refer to measures already adopted by the Conservative government in the parliamentary session which has just ended.



Submitted by Clive Barwell on Thu, 18/05/2017 - 23:05

At £23,250 (not £23,000 referred to above), a tariff income applies, which is £1 per week per £250 over the lower threshold of £14,250. In the Care Act 2014, the original proposal was to increase the threshold to £118,000, but with a lower threshold of £17,000. However, the tariff income still applied, meaning that anyone with assets of £118,000 had a tariff income of £405 per week. With Local Authorities generally not paying much more than £450 - £500 per week for a care home, anyone with just a State Pension still wouldn't qualify for Local Authority help! If this manifesto promise also includes a tariff income, it will probably turn out to be a meaningless gesture.

Submitted by David Robinson on Fri, 19/05/2017 - 13:36

I agree Clive. The devil will be in the detail. I think there is also plenty of scope for a fudge around "hotel costs" and eligibility criteria. Call me sceptical but I think this won't be as clear cut as the manifesto suggests.

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