Cap on Care Costs - What are the implications?
The care cap is a new ruling the government has introduced that is set to be implemented in October 2025. The cap relates to the amount an individual spends on their assessed eligible social care needs in England and will be set at £86,000 for everyone. This means that from October 2025 individuals, who are self-funding their care plan and have substantial assets, will not have to spend more than £86,000 on their own personal care in their lifetime. However, the care cap does not cover contributions or payments for care made prior to the implementation in October 2025. The cap is applicable to anyone who funds their own care.
What expenditure counts towards the care cap?
The government has stated that the care cap will be set at £86,000 for each individual's own personal care. Personal care costs are those costs which an individual requires to meet their support and care needs.
However, not all costs will be considered when determining whether the care cap has been reached. Costs not considered include, amongst others;
-All costs prior to October 2025
-Daily living costs for people in care homes (e.g. food, accommodation, energy bills and consumables)
-Any additional costs an individual makes towards their preferred choice of care home
-Financial contributions to a care package paid by the local authority or a third party, such as a family member
-Needs which are met by a carer.
Under the new scheme all individuals will be required to finance their own daily living costs whether they live in a care home or their own home.
Once an individual's expenditure on care costs has reached the care cap limit of £86,000, they will no longer have to pay for their care costs. However, if they continue to require social care, then they will have to continue paying for the non-personal care costs.
Financial Limits (also known as capital limits)
An extended means test looks at an individual's assets and income to determine what they can afford to pay towards their care costs. The limits will also be changed from October 2025.
Personal Assets;
-Financial contributions an individual pays
Lower Capital Limit -Less than £20,000 (previously £14,500);
-State funded care
-No contribution is required from assets
-Contribution towards care costs may be made from income if affordable
Between the capital limits;
-Contribution from income and
-Means-tested 'tariff' from assets for potential contributions to be paid by an individual
Upper Capital Limit - More than £100,000 (previously £23,500);
-All costs must be paid by an individual as a self-funder until assets fall below £100,000 or the care cap of £86,000 is met
Summary of Care Cap
The government will fund personal care costs for each person once the limit of £86,000 has been met by individuals.
Other care-related costs will not count towards the £86,000 cap.
The change in capital limits will impact on the amount an individual contributes.
At Clapham & Collinge we have a dedicated team of experts who are able to provide you with all the necessary information, support and legal advice relating to potential care costs. Our legal advice is bespoke, confidential and totally designed around you, helping you reach the best outcome.
If you would like to seek advice on the care fee cap or any other private client related matters such as Lasting Powers of Attorney or Wills, please contact our dedicated client relations team on 01603 693500, email enquires@clapham-collinge.co.uk or visit www.clapham-collinge.co.uk
This article is provided for general information purposes only and does not constitute legal advice or professional advice.
Our article in the December 2022 edition of Norfolk WI Magazine, with the same title, was correct at the time of printing. The planned cap on care fees has subsequently been delayed by 2 years.
