View the article online at http://citywire.co.uk/money/article/a612195
MP: care fees cap won't end bill burden for families
MP John Redwood has criticised the Dilnot Commission's plans to cap care fees at £35,000, saying it will not help families as much as promised.
A day after it was reported that the government is going ahead with the Dilnot Commission’s recommendation for a £35,000 lifetime cap on care fees, MP John Redwood has argued that the cap would still leave middle-class families struggling to fund care home costs.
The Dilnot Commission, led by economist Andrew Dilnot, proposed no one should pay more than £35,000 for care in their lifetime. This recommendation was left out of the government’s draft social care bill last month owing to the £1.7 billion cost, but it was reported yesterday that it has decided to include it in a large-scale reform of care.
However, Conservative MP Redwood has criticised the cap, saying that it would protect the inheritances of wealthy families at the expense of taxpayers, and that a £35,000 cap would fail to provide the amount of protection families think it would.
What will count towards the cap?
In a paper for the Centre for Policy Studies titled Care for the Elderly, Redwood said people could still face huge care bills because much of the money they spend on care for loved ones would not count towards the cap.
The Dilnot Commission said the cap should apply to care costs but, Redwood pointed out, does not cover the cost of accommodation. This means families’ contributions to care, which may be substantial, will not be accounted for in the cap.
According to care provider Anchor, the average cost of a care home is £664 per week, but if you live in the south of England this cost increases to around £870 a week.
The cap is also dependent on how much care should cost, as set out by the local council. Although a care home may cost £500 per week, the council may only cover £400 per week, with families having to make up the difference.
Under the Dilnot proposals, that extra top-up to cover care fees would not count towards the cap. Effectively people could spend far more than £35,000 before they reach the cap.
Using calculations from insurer Partnership, Redwood said families could pay 90% of the cost of a loved-one’s care over four years, even if the £35,000 cap was in place.
Although councils pay around £461 a week for people who qualify for residential care, including the cost of accommodation, care home fees can be much higher. In southern England Partnership estimates the average rate is £817 a week.
As accommodation costs are not taken into account for the cap, just £217 per week would count towards the cap despite the top-up being £356.
On this calculation it would take two and a half years for the family to hit the cap of £35,000, but by that time they would have paid £105,000 out of their own pocket towards care.
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