Plans for a £75,000 cap on the amount the elderly will have to pay for social care in England has been welcomed by a leading health think tank.
However, The King’s Fund warned that with both the NHS and social care facing significant and growing funding pressures, the announcement is “not the end of the journey - difficult choices lie ahead about how much to spend on health and social care and how to fund this”.
Health Secretary Jeremy Hunt also announced today that the threshold for the assets a person can hold before losing state support will rise sharply, from £23,000 to £123,000 from April 2017.
He said it will be paid for by a combination of employer national insurance contributions and freezing the threshold for paying inheritance tax at £325,000 for an extra three years.
The intention is not that people should have to pay up to £75,000 for their care costs, but by creating certainty that this is the maximum they will have to pay,” he said.
“They can then make provision for pension and insurance products that they are covered up to the value of the cap, thereby reducing the risk of selling their home or losing an inheritance that they have worked hard to pas son to their family.”
Richard Humphries, Senior Fellow at The King's Fund, said:
“Today's announcement is an important milestone on the way to a sustainable settlement for social care in which costs are shared fairly between the individual and the state – a principle we have long argued for.
“Together with the reforms set out in the draft Care and Support Bill, this at last offers the prospect of replacing the unfairness and confusion of the current system with a clearer framework that will enable people to plan ahead.
“For the first time, individual liabilities will be limited, protecting people against the worst aspects of the current care lottery.
“The increase in the upper threshold for means-tested support to £123,000 is also a boost for those with modest resources who are most heavily penalised under the current system. The combined effect of the cap and a higher means test threshold will see more people receive public funding.
“However, a cap of £75,000 will limit the number of people who will benefit from it - this should therefore be seen as a starting point for future governments to reduce the cap over time, as the economic position improves.
“Also, by the time it is implemented in 2017, it will be seven years since the government said in the coalition agreement that it understood the urgency of reforming social care.
“In the meantime, pressures on the current system will continue to grow, with many local authorities forced to make further cuts to services.”