Individuals that pay their own care home fees stump up an average of £12,500 a year more than those residents whose fees are footed by their local authority.
The average annual fee for 'self-funders' is £44,252 a year, compared to a typical £31,720 for council-funded residents, research from Just Group has revealed.
The difference equates to more than £1,000 a month for self-funders to pay for social care compared to council-funded residents.
Analysis by the Competition and Markets Authority (CMA) has also found that the number of care homes charging different fees to councils and self-funders has increased substantially. In 2005 just 20% of care homes operated a differential pricing policy compared to around 90% today.
Furthermore, it was revealed that fees charged to local authorities do not cover the costs of running care homes, forcing them to increase fees for self-funders who effectively subsidise cash-strapped councils.
Average annual Local Authority fees for Council-funded residents and self-funders
|Region||Average Local Authority fee per year per resident||Average Local Authority fee per year per self funder||Average fee differential (£)||Average fee differential (%)||Median fee differential (%)|
|East of England||£30,368||£44,512||£14,144||50%||49%|
|Yorkshire & Humber||£27,716||£37,544||£9,828||37%||36%|
Source: Just Group, 2 September 2019
Stephen Lowe, group communications director for Just Group says: “These figures start to explain why people think care fees are unfair when those footing their own bill are charged many thousands of pounds a year more than another person who could be in the same home and receiving the same care but paid for by the local authority,”
“For many people, planning for later life care consists of crossing their fingers and hoping it doesn’t happen to them but when it does, the cost is a real eye-opener, as our 2019 Care Report reveals.
“Three-quarters of over-45s who had been involved in arranging care said they were surprised by how little financial support the State provides and nearly nine in 10 (88%) were shocked at how expensive care is.
“With the care crisis deepening, the government must take the lead and be clear that reforms are on their way.”
During his leadership campaign, Prime Minister Boris Johnson acknowledged the need for the government to address the care crisis but no timetable has yet been set for its long-awaited green paper on social care. He has also claimed in interviews that money will be made available for social care in this Wednesday’s spending review.
Mr Lowe adds: “The public isn’t fooled by promises and no action – more than half (52%) agree that social care policy is being neglected because of Brexit.
“Brexit is undoubtedly a big issue but the parlous state of today’s social care system is letting everybody down – councils, care homes, care workers and of course the residents who are most vulnerable of all.
"The promise of more funding is welcome but it doesn’t address the total absence of any long-term policy to address the fundamental problems within the social care system.”
Responding to a report on social care costs by Just Group, Cllr Ian Hudspeth, chairman of the Local Government Association’s Community Wellbeing Board, says:
“Every pound invested in council-run services, such as social care, helps to improve people’s lives for the better and save much more money for other public services further down the line.
“Councils are doing all they can for their residents, but recognise that self-funders pay more for their care. This is one of the fundamentally unfair aspects of the system, which needs to be addressed as part of a long-term, sustainable settlement for adult social care.
“What is also needed is financial certainty for councils, including urgent confirmation in the Spending Roundthat current funding streams such as the Better Care Fund - which improves working between the health service and social care - will continue into next year.
“This week’s Spending Round is also an opportunity to properly fund councils and help meet the more than £1 billion of the £2.6 billion of inflationary and demand pressures on councils next year which relates to social care, in addition to existing pressures.”
Your Home Pays Their Fees
So if your struggle to buy your own home then need to go in a care home in your old age and use your home to pay fees you are paying £250 a week extra to keep another person who does not have to pay, best to find a care home that won't accept anyone paid for by the council so you are nor subsidising them. I prefer euthanasia to using a care home so make it legal.
Care home tax for savers
In round numbers (ie slightly overstated for some) if you are fool enough to believe you should be self sufficient and save for your old age, you would be hit with a 50% care home tax (plus VAT plus, plus ... I am sure others can think of "hidden" ways we pay extra tax). I know this is claimed not to be a tax, but to me a compulsory deduction applied on a discriminatory basis is a tax, even if concealed.