Self-funders will still have to pay 90% of care costs even if £2 billion plans to increase government support come into force, according to long-term care annuity specialists Partnership.
Under proposals laid out last month by Andrew Dilnot’s independent care commission, the government will fund any care costs above £35,000 and the threshold of assets people can hold and still qualify for means-tested help would rise from £23,000 to £100,000. Together this will cost the government an extra £2 billion a year.
However Partnership has warned that care home ‘hotel’, funding is not covered by the plans, meaning those moving into homes will still be saddled with heavy costs.
Partnership said its policyholders, who spend on average four years in a care home, could have to meet 90% of the costs they are paying under the current rules.
Chris Horlick (pictured), managing director of care at Partnership said: ‘There is a significant danger that Dilnot’s proposals may have inadvertently lulled self payers into a false sense of security. Many may believe that the government will pick up all their care costs once they have paid the first £35,000 of their social care costs. However, this is simply not the case.'
Horlick said financial advice was critical given care home costs could hit £50,000 a year. An individual with care costs of £1,000 a week will pay a total of £208,000 under the current system if they live for four years. According to Partnership they would still pay £189,000 over that period under the new rules.
‘Many may believe that if you have paid for care services then all you do is submit a receipt to the local authority and once you have reached the proposed £35,000 threshold they will pay for the rest,’ said Horlick.
‘They will not. Local authorities will make an estimate based on the "notional amount" it would have cost them to provide this care service for one of their maintained residents in a basic home. This may be far less and you may spend far more than £35,000 as you seek to reach the threshold.’