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Cap on Care Costs Delayed Until 2020

The government has today announced that the cap on care costs has been delayed until at least 2020.

The Care Cap was one of the key elements set out in the Care Act 2014 and was due for implementation on 1 April 2016. 

When the Care Act was introduced the then sponsoring minister (Norman Lamb) stated:

"The Care Act represents the most significant reform of care and support in more than 60 years, putting people and their carers in control of their care and support. For the first time, the Act will put a limit on the amount anyone will have to pay towards the costs of their care."

However, it should be borne in mind that the cap was never what it seemed.

The headlines suggested that no-one would have to pay more than £72,000 towards the costs of their own care - and yet:

  • Spending on residential care would ignore the first £230 per week on the basis that this would have to be spent on 'bed and board' in any event. Some observed that, as the state pension is less than that, the assumption seemed incorrect.
  • Spending on care prior to the introduction of the cap would not count. I expect that will still be the case if the cap is introduced in 2020 - meaning that generations of privately funded care home residents will probably never receive funding assistance.
  • Spending on care would not contribute towards the cap unless the local authority had assessed the person's needs as eligible. Unfortunately if you didn't realise that, and didn't request an assessment, none of what you spent prior to the assessment counts.
  • The rate at which care costs count towards the cap is limited to what the local authority would need to spend to purchase that care. For example, if you live in a residential home that charges £650 per week but the local authority can purchase the same bed for £450 a week, the extra £200 you pay would not count towards the cap.  You would spend £650 per week, but only £220 would count towards the cap (£450 - £230). It would take you over 6 years to hit the cap, and over that time you would have spent c.£212,000.

Privately funded care users subsidise local authority funded care users. Anyone who deals with the care system on a day-to-day basis knows that to be true.

Local authorities and the health service argue that this is because they are able to use their 'bulk buying' power to obtain better rates.

That may be true, but budget constraints and increased demand have resulted in local authorities and the health service constantly seeking to reduce the price they pay.

Many would argue this has pushed care providers to breaking point. Those providers have survived by charging private clients a much higher rate than they charge the state.

The introduction of the care cap was supposed to coincide with the introduction of a right for anyone to require the local authority to 'commission' their care. This would have enabled self-funders to access the local authority rates.

That had to happen at the same time as the care cap came in, otherwise we would have the nonsensical position that costs would accrue against the cap at a rate that could not be accessed by people actually purchasing the care.

However if everyone could access the local authority rates that would mean no more subsidy by privately funded users. The consequence of this would be a general increase in the price charged to local authorities - or the failure of providers.

This at the same time as providers will be dealing with the increased minimum wage and the Care Quality Commission is driving for higher care standards.

By delaying, the government has given itself additional time to solve these problems, which lie at the heart of the concept of a cap on care costs.

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