In England, social care isn’t free. As such, everyone who requires care (not just those who choose ), are required to pay for their care. Local authorities are able to charge for services, although they may also offer some services at reduced costs or even free of charge. As such, those who need care discover that they experience very high care costs. This leads to a reducing estate and assets, and most income goes on care. This looks set to change with the social care cap.
In September 2021, the government announced a social care cap. This will be a cap on care costs which will come into effect in October 2025. It was originally due to come into place in October 2023, but this has been delayed by two years. The social care cap will place an upper limit on the amount an adult receiving social care will have to spend.
The social care cap is effectively, a way of limiting the total liability an individual has for their own care costs. In essence, an individual will be expected to pay up to a certain total amount and then, from that point, the state will cover the care costs. This means there will be a maximum amount that any individual adult will have to pay throughout the course of their life.
As such, individuals won’t have to delve into their savings or assets to fund care beyond the social care cap – unless they choose to do so.
Not everyone will be able to afford the maximum amount – as now, not everyone can afford care costs. Means testing will be used to determine how much individuals should pay.
As yet, we have draft guidance on how the social care cap will operate in practice, but this is still being finalised. It will be implemented using powers in existence under the Care Act 2014.
The social care cap that comes into place in October 2023 is currently being set at £86,000. It’s likely that this will change in the future.
The capital limits are the financial limits used as part of the financial assessment when determining if someone has the money to pay for their own care. The upper capital limit represents the point at which someone can access means-tested local authority support (so some financial support, but not the ability to have all care paid for by the local authority). You must have capital amounts under the upper capital limit to be eligible for means tested support. At the moment, the upper limit is just over £23,000. The lower limit is currently just over £14,000. If you earn below this, the local authority pays to meet your care needs entirely.
In October 2025, the capital limits are set to radically change. At the moment, the upper capital limit is set to change to £100,000. The lower capital limit will increase to £20,000. If you have assets less than £20,000 you won’t need to contribute to the cost of your care from your property or savings. If you have assets less than £100,000 then you will be eligible for means-tested support and may have to contribute some, but not all of your care costs. The assessment will look at your income and capital. If you cannot meet the care costs from your income, you will be required to contribute £1 for each £250 you hold in assets which are chargeable.
At the moment, many people rightly assume that there is little practical benefit to having a care needs assessment as they will self-fund their care anyway. With capital limits being much higher and the introduction of the social care cap, there’s more imperative to ‘start the clock’ once you start spending on care. This means more people will seek a care needs assessment earlier so that the amount they spend on care can count towards their personal social care cap, minimising the amount that they will spend from their own pocket.
It’s also important to explain that the social care cap shouldn’t limit how you choose to access care. If you are in a private residential care home, or wish to use one, that is your choice, even if the social care cap means that you no longer have to pay. The amount care homes charge the local authority is between them and not a concern of the residents.
However, there are differences in costs between different care homes. As such, it’s possible that you may reach the social care cap at a different rate to someone in a similar position using a different care home, or domiciliary care.
In addition, if you self-fund your care, and reach the social care cap, the local authority may change how they meet your care needs. For example, they may recommend a move to a different residential home. However, we would expect that it should be possible to operate a ‘top up’ system, as at present. In this way, the local authority contributes a set amount and then the individual, or their families, choose to pay the top up fees, so that the individual and their families have choice about their care.
Unfortunately, no, the social care cap won’t apply retrospectively. Any amounts that you or a loved one have paid towards care before October 2025 won’t count towards your personal social care cap. There are a few exceptions to this, if you are already part of the Trailblazer Initiative.
There has been a lot of media chatter about the social care cap. There are pros and cons. It will help to ensure that an individual with assets is able to pass these on to their beneficiaries, rather than spend it all on care. However, it is likely going to be quite complex to administer and there will, inevitably, be teething problems. There may well be disputes between individuals, families and local authorities about an individual’s care needs with families over asserting them and local councils under asserting them.
It’s important that individuals and their loved ones make informed choices about their care and choose care provision that best suits them. This will almost certainly mean choosing care homes with higher standards and amenities, which will require top up fees.