The Care Bill And Changes To Funding Residential Care Costs

There will be major changes to the arrangements for the Local Authorities to fund residential care, but as always the ‘devil is in the detail’. It will be more important than ever to have clear advice to understand the new funding arrangements when they come into force.

Breaking the Postcode Lottery and Needs Assessments

Individuals will be entitled to an assessment of their eligible care needs measured against a National Eligibility Threshold ending the postcode lottery of different funding criteria by different Local authorities. But the care needs will still be set at a ‘substantial’ level before qualifying for any Local Authority funding.

Following on from the needs assessment the individual will receive an agreed Care and Support Plan to meet the identified eligible needs and a Personal Budget which outlines the total costs involved in providing the agreed care and support, irrespective of whether they are to be met by the local authority or not. The total costs will be set at the rates that the Local Authority would pay which may be less than the amount the individual might actually pay.

The Cap on Costs

From April 2016 the Government will introduce a lifetime cap on eligible care costs of £72000 for people of pensionable age. Eligible care costs can include costs of residential care and costs of care provided at home.

Eligible care costs do not include daily living costs – i.e. board and lodging costs – which do not count towards the care costs cap of £72000.

The Personal Budget will keep a running record of the individual’s expenditure contributing to the lifetime Costs Cap.

Once the costs cap limit has been reached the Local Authority will meet the eligible care costs but the individual will still have to meet the daily living costs, whilst he or she can afford to pay. Where the Local Authority is responsible for funding all the costs of residential care the daily living costs will be capped – initially at £12000pa.

The Means Test Threshold

From April 2016 the upper limit for a residential care means assessment will rise from £23250 to £118000 (including the value of the home where it has to be taken into account). The lower limit at which care is entirely funded by the Local Authority is likely to rise from £14250 to £17000.

The catch is that the assessed person will have to make a contribution of £1pw for each £250 over the lower threshold. At the top of the scale this would result in a contribution of £400pw

Deferred Payment Scheme

From April 2015, there will be a new option to defer paying care home costs in certain circumstances where an individual owns a home, meaning the home does not have to be sold during the individual’s lifetime. The local authority will pay the care home costs during this time and will then reclaim the costs incurred on the sale of the property after the person has died. The Local Authorities will be able to charge interest on the outstanding amounts unlike the present deferred payment arrangements offered by Local Authorities.

The Future

It will be particularly important to ensure that an individual’s social care needs are properly assessed at the outset and an appropriate Care and Support Plan and Budget put in place.

The funding options together with the different elements that go to make up the total cost of care and the interaction of the Costs Cap and the changes to the means assessment thresholds are not as straightforward as the newspaper headlines may have suggested when the Care Bill was first introduced.

The moral must be to seek professional advice at an early stage whenever individuals or family members are likely to need care to meet their future needs whether that is in their own home or a residential home.