The Care Cap And Why It Matters
On the 8th September, the Government’s plans for a new Health and Social Care Levy won a majority in a snap commons vote. The tax will raise funds for the NHS and subsidise health and social care reforms, including the long awaited care cap. But what is the care cap, and why does it matter?
What is the care cap?
The care cap will change the way that adult social care is funded in England, so that there is a limit to the amount that people pay towards their own social care.
Under the current funding system, social care in England is paid for by local authorities or – where the person has savings of more than £23,250 – by the person themselves. These costs can be catastrophic, with the Government acknowledging that one in seven people face lifetime fees of over £100,000.
Plans to cap individual costs were first mooted over a decade ago. In 2010, the Dilnot Commission on Funding and Care Support recommended a cap on the amount that an individual pays towards their own care, in order to make the adult social care system fair and sustainable. In 2014 the Government enshrined the proposal in Section 15 of the Care Act. Implementation of the cap is long overdue.
Under the proposed changes, the new Health and Social Care Levy will raise funds for social care reform, including the care cap. The tax will come into force from April 2022, initially taking the form of a 1.25% rise on National Insurance, before becoming a separate tax on earned income from 2023.
As from October 2023, lifetime care costs will be capped at £86,000. People with assets between £20,000 - £100,000 will receive partial subsidies, and those with less than £20,000 will have their care fully funded.
Defining health and social care
In England, a distinction is drawn between health and social care. Where a care need is deemed to fall under the remit of health, the costs are met by the NHS. In contrast, social care is paid for by local authorities or by the person themselves.
The National Framework for NHS Continuing Healthcare accepts that whilst there is no legal definition of either health or social care,
Healthcare is understood to mean the care that is needed to treat, control, manage, or prevent a disease, illness, injury, or disability.
Social care is recognised as the support that is needed in activities of daily living.
To understand the implications of this arrangement, we need look no further than the world of dementia care. Given that dementia is ‘an umbrella term for a range of progressive conditions that affect the brain’, it would seem plausible that dementia care could be recognised as a health need. But this is not usually the case, because dementia care is largely concerned with activities of daily living – such as personal care, administration of medications, domestic tasks, and social stimulation – and these types of activities are understood as social care.
The cost of social care
Social care at home can prove surprisingly costly. Domiciliary care rates average around £15 an hour. This means that a person who requires four half-hour care calls per day (morning, lunchtime, dinnertime, and bedtime) can expect to pay an average monthly charge of £900. In some areas, costs are significantly higher. Residential care placements are even more expensive, with costs averaging £2,600 a month in care homes and over £3,400 a month in nursing homes.
Local councils use financial means tests to determine who foots the bill. The test quantifies the person’s total assets – including savings, stocks, and shares – in order to establish eligibility for financial assistance. Currently, anyone with savings of over £23,500 must pay the full cost of their own care.
So long as a person lives in their own home, they are not required to sell their home to pay for care. Long-term residential care, however, is a different matter and the person’s home is included in the financial assessment unless their partner – or in limited circumstances, another relative – is still living there. This means that without a cap on care costs, many people sell their homes to pay for care.
The costs of social care can cause untold distress at a time when people are at their most vulnerable. The burden of worry can be devastating, as people realise that they may not be able to leave children and loved ones the financial security that they hoped to provide. And here we come to the difficult question of fairness.
Towards fairness
Given that self-funders pay substantial fees for the same care that others receive free of charge, it is unsurprising that many feel a sense of injustice. Yet we might also question whether it is reasonable to expect the state to pay costs for people who have sufficient assets to self-fund, when central and local budgets are already squeezed.
The burden of the new Health and Social Care Levy falls largely upon people of working age, and even within the Conservative Government, there are voices of dissent. Defence Minister James Heappey told BBC Breakfast “The social contract is that whilst you are of working age, you pay your taxes for those who aren’t working in anticipation that when you yourself are retired, those who are of working age at that time will do the same for you. That social contract has become dangerously out of balance.”
Generational inequalities in wealth and home ownership are central to the debate. In essence, people of working age who may themselves be unable to ‘gain a foot’ on the property ladder will now pay additional taxes to protect the wealth and homes of others.
And so, if we expect people of working age to fund the care cap, we must also look towards reforms to level the playing field for younger generations. A commitment to affordable housing, and to the real Living Wage must be prioritised. Younger generations must be afforded opportunities to build their own homes and futures.
The quest for home and stability is shared across generations, in all parts of society. The desire to hold on to what we have earned in order to provide loved ones with security after we die is not elitist, and nor is it selfish.
Does it deliver?
Of course, the question we should be asking is whether the care cap, in its current form, is fit for purpose. The £86,000 cap is a far cry from the £35,000 limit recommended by the 2010 Dilnot Report. And whilst the cap covers the costs of care services, it does not include accommodation fees. This means that some people needing residential care will pay lifetime fees above the limit of the care cap.
Additionally, not all social care is protected by the cap. In order to qualify for local authority care, a person must have a social care needs assessment. The threshold for social care needs is dauntingly high, and many people who need support do not qualify. In such instances it is necessary to self-fund, and these costs fall outside of the care cap.
Crucially, the high level of the cap – £86,000 – means that many people will still need to sell their homes to pay for care. For example, a person whose total assets, including their home, amount to £160,000 would likely still need to sell their home to pay for long term residential care.
The Government is now suggesting the extension of Deferred Payment Agreements (DPAs), which were initially introduced in 2015. Under the terms of a DPA, care payments are deferred, and when the person dies, their home is sold to repay the debt.
In 2019, the Conservative Party manifesto pledged that no one would need to sell their home to pay for care. The care cap, in its current form, does not deliver on this promise.
Written by Sandra Bishop
Sandra Bishop studied at Newcastle University where she achieved First Class Honours in Religious Studies. After attaining a PGCE with Distinction, Sandra spent twenty years working in education and social care before rediscovering her love of writing. Sandra specialises in educational resources, informational articles, blogs, and creative non-fiction. You can view her portfolio here.
References
Department of Health, Commission on Funding of Care and Support Our Report
<https://webarchive.nationalarchives.gov.uk/20130221121534/http://www.dilnotcommission.dh.gov.uk/our-report/> [Accessed 19th July 2021]
Department of Health and Social Care, National Framework for NHS Continuing Healthcare and NHS-funded Nursing Care (October 2018 Revised)
<https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/746063/20181001_National_Framework_for_CHC_and_FNC_-_October_2018_Revised.pdf> [Accessed 19th July 2021]
Dementia UK, What is dementia?
<https://www.dementiauk.org/understanding-dementia/what-is-dementia/> [Accessed 19th July 2021]
Age UK, Paying for homecare
<https://www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-homecare/> [Accessed 19th July 2021]
Age UK, Paying for residential care
<https://www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-a-care-home/> [Accessed 19th July 2021]
The Conservative and Unionist Party Manifesto 2019
<https://assets-global.website-files.com/5da42e2cae7ebd3f8bde353c/5dda924905da587992a064ba_Conservative%202019%20Manifesto.pdf> [Accessed 9th September 2021]
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