The Care Fees Cap Con

The Care Fees Cap Con

On 11th February 2013 Health Secretary, Jeremy Hunt (MP), announced proposals to funding care fees for mainly the elderly, but of course include anyone that has long term care needs.  [Addition post script: Chancellor George Osborne suggested in an interview on the BBC on 17 March 2013 that the cap would be a Social Care Fees Cap - we guess the devil will be in the detail]

The Key Points

• Means test threshold to be increased from £23,500 to £123,000.
• A Care Fees Cap on the maximum that you will pay to be set at £75,000.
• Devil in the detail: The care fee cap is a cap on how much you will pay for nursing fees.

What this means:

Currently nursing fees are funded by the NHS and are free.

The care fees cap does not include social care i.e.  your food and your accommodation.

The government has saved £20 billion by abolishing the second tier of State Pensions called S2P (State Second Pension), formerly SERPS State Earnings Related Pension Scheme and before that the State Graduated Scheme to combine it all into a flat rate State Pension.

People in their 50’s and younger will lose out despite having paid national insurance towards the State Second Pension for 35 years+.

We believe this is all political spin.

Our view
The increase in the capital limit for means test being increased to £123,000 is welcome but the average house price in the UK is around £160,000 so most people will actually have to at least pay something for their care.

The move to set a cap on nursing care fees (i.e.  you medicines and medical care) we see as a tax on all.  At the moment NHS care is free, this may mean that medical care whilst in a home now must be funded.

Clearly, we do not have full details yet, but we suggest when you read or hear news on the subject you listen carefully to the spin.  We are an ageing population and the country cannot simply afford to fund care for all.  

All too many times we have clients that express their disgust to us that they work all their lives and will be forced to pay for care yet those that do not work or have been happy to not work or save all their lives will receive fully funded for care.

Care Fees Planning: The announcements still mean you need a care fees plan.  Making your sure the assets that you want to leave to loved ones are planned for and those that you want to allocate to funding you care.  Contact us to work on your care fees plan.