Sunday, 05 July 2015

Care costs for elderly to be capped at £75,000

The government is expected to announce plans to cap the overall cost of care for individuals at £75,000, despite recommendations to set the limit much lower.

Health secretary Jeremy Hunt is expected to reveal his policy on long-term care funding in the House of Commons later today after months of discussion.

From 2017, pensioners and disabled adults will have to pay up to £75,000 of any care bills they incur before the state steps in under the new arrangement. There will also be an increase in the means-test threshold, so that anyone with assets of under £123,000 will automatically receive free care.

Currently, if someone needs residential care and has more than £23,250 in savings, capital or assets, they must pay for their care in full. The increase in the threshold is likely to help more than 100,000 extra pensioners.

The government is likely to say it will fund the changes by freezing the inheritance tax threshold for three years.

Economist Andrew Dilnot recommended the introduction of a cap on the amount individuals have to pay towards the cost of care in a report for the government published in July 2011. His report suggested a cap of £35,000, but the £1.7 billion cost of this was judged too expensive by the Treasury.

Social landlords have previously criticised the government for dragging its heels over the implementation of reform, saying it breeds uncertainty in the care sector.

Mr Hunt told the BBC’s Andrew Marr Show yesterday that the government is trying to avoid people having to sell their homes to pay for care. ‘The worst thing that can happen is that at that vulnerable point in your life you lose what you have saved for,’ he said.

‘What we are trying to do is be one of the first countries in the world that creates a system where you don’t have to sell your home.’

Deputy prime minister Nick Clegg gave the same message in an article published in yesterday’s Sunday Telegraph. ‘Every year between 30,000 and 40,000 people sell their home to pay the bills: between 80 and 110 people every single day,’ he wrote. ‘That simply isn’t fair, and tomorrow the government will be confirming our plans to change the system.’

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