View the article online at http://citywire.co.uk/money/article/a611739
Care fees cap could be in place by 2017
The government is now getting behind a plan to cap care fees at £35,000 per person, after ignoring the reform in its recent care bill.
The government is to go ahead with plans recommended by the Dilnot Commission to cap care fees at £35,000 a year having previously shelved the idea on cost grounds.
Proposals by economist Andrew Dilnot in his review of care included capping care costs at £35,000 per person, with the government picking up the bill for amounts over that.
Although the government acknowledged that capping fees would be the ‘right basis for any new funding model’, it stopped short of acting on the proposal owing to the £1.7 billion a year cost.
If the cap fits...
However, according to reports, the government is now getting behind the care fees cap, and it could be implemented as soon as 2017. The change of direction would also see the means-testing threshold for care fees raised from £23,350 at present to £100,000.
This means individuals could then buy insurance to cover the £35,000 cap, knowing they would not have to pay any more.
The plans for the cap are likely to be announced in the autumn as part of a coalition relaunch, and be included in the Care and Support Bill, according to the Guardian.
In July the government published a care and support white paper and draft care and support bill to try to modernise adult care. Although it set out a number of reforms, including plans to defer care costs until after death and the end of the postcode lottery for care, it failed to introduce the proposals set out by the Dilnot Commission to cap fees.
Andrew Lansley, secretary of state for health, defended the exclusion of the Dilnot cap in July: ‘While this is the right thing to do and it is our intention to base a new funding model on the principles if a way to pay for it can be found, any proposal which includes extra public spending needs to be considered alongside other spending priorities, which of course include the demographic pressures on the social care service itself.’
He said the government would review the inclusion of the cap at the next spending review, but government will now firm up plans to cap care fees after an intensive meeting by ‘the quad’ – David Cameron, Nick Clegg, chancellor George Osborne and chief secretary to the treasury Danny Alexander.
To find out more about long-term care and care fees reform, read these guides from The Lolly:
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