Long Term Care Reform
Following the Government’s announcement to implement a new funding model for adult social care, the ‘Dilnot Cap’ on care costs has received a great deal of news coverage.
There are three key elements of the new reforms which, if approved by parliament, will be implemented over the next three years.
• A £72,000 cap on eligible care costs to be introduced in 2016.
• An increase in the means-tested thresholds, from April 2016 to £118,000.
• An interest bearing universal deferred payment system will be introduced in April 2015.
The proposed new cap relates only to care costs and not to general living costs such as accommodation and food. By removing these costs, which the Government is capping at £12,000 a year, the probability of reaching the cap is reduced.
Furthermore the cap only relates to the local authority’s rate of care. As many people in care will find themselves paying in excess of the local authority rate for care costs, they will still need to budget for considerable costs as their care needs may be long term, and the mounting cost of bills could easily wipe out any home equity. The attendance allowance will only be payable until you reach the cap, at which point it will cease.
There are some non means-tested benefits which are available to those in residential care, including the state pension, which can help fund general living expenses. Further clarity is needed in relation to the relevant tariffs and as yet, the lower thresholds have not been agreed.
Over the last few years The Fry Group has developed a degree of skill in the long term care market. With qualified and regulated advisers, we provide specialised and independent advice to individual clients. We can advise on and help you take care of every aspect of your financial affairs, today and all the way to retirement and beyond. You ought to consider whether you want to navigate this minefield personally at a time when, inevitably, you will be less capable than you are now. We can prepare a Lasting Power of Attorney for you, which will enable you to delegate understanding these aspects to a well-informed professional such as ourselves, or younger family members, assuming they have time to devote to this.
If you have any concerns relating to your financial future and care plans please get in touch and remember you don’t need to be a current client for us to help.