£72,000 cap on elderly care costs to be introduced
The government has launched a consultation into plans to introduce a £72,000 cap on the cost of care for the elderly – a move that it says will benefit one in eight poorer pensioners.
As well as benefiting those on lower incomes, the scheme will also cut bills for wealthier pensioners by up to a fifth, the government said.
The social insurance scheme – set to be introduced in 2016 – will replace the current system of care, where elderly people receive different levels of assistance depending on where in the country they live.
The new scheme will see people paying into a "care account" set up by their local council, which will pay care fees up front and claim them back from an individual's estate after death. It is thought that this "deferred payment" system will prevent people from having to sell their homes to pay for care upfront.
However, critics have pointed out that the cap is to be set at double the £35,000 figure recommended by Andrew Dilnot in the government-commissioned report he published in July 2011.
The government itself said it will be at least four years after the changes are implemented in 2016 before people aged 65 and over start to hit the £72,000 cap; while critics have also pointed out that limited numbers of people will survive beyond the point where they reach the £72,000 costs cap.
Impact of the proposals
Michelle Mitchell of charity Age UK said: "It is crucial that the public understands what costs are included under the cap and what impact the proposals will have.
"With a cap set at £72,000, it is clear that only a relatively small percentage of older people will receive financial support as a result - namely those who have the greatest care needs for a considerable amount of time.
"It will also only apply to those who are assessed as eligible – so people may be surprised that even those with quite considerable care needs may not have access to the system."
The government also announced that individuals will be expected to contribute towards the cost of staying in care homes – to the tune of £12,000. This figure, which will cover accommodation, food and bills, will not count as spending towards the cap.
Everything you own: all your assets (property, cars, investments, savings, insurance payouts, artwork, furniture etc) minus any liabilities (debts, current bills, payments still owed on assets like cars and houses, credit card balances and other outstanding loans). When you’re alive this is called your wealth; when you’re dead, it becomes your estate.