A government initiative to cap care costs at £72,000, due to take effect in April 2016, has been postponed until 2020.
In a letter to the Local Government Association (LGA) on 17 July, Community and Social Care Minister Alistair Burt said proposals to cap care costs and create a supporting private insurance market were expected to add £6 billion to public sector spending over the next five years.
Confirming that the cap would be delayed until April 2020, he added: “A time of consolidation is not the right moment to be implementing expensive new commitments such as this, especially when there are no indications the private insurance market will develop as expected.”
Cllr Izzi Secombe, chair of the LGA’s community wellbeing board, said: “In an ideal world, we would have funding for both the system and the reforms but we have to be realistic about where scarce resources are needed most. Any money from delaying the reforms must be put back into adult social care services and support putting it on a sustainable footing.”
Liberal Democrat MP Norman Lamb, Care Minister in the coalition government, warned that the policy had been “abandoned”. He told BBC Radio 4’s Today programme: “I can envisage no circumstances in which a Tory government in 2020 will see it as a priority to fund this reform.”
Jim Boyd, director of corporate affairs at care annuities specialist Partnership, said: “With an estimated 150,000 people entering care each year, the introduction of the Care Bill was supposed to provide them with a consistent framework in which to make concrete plans around care funding. The delay of the introduction of the ‘care cap’ to 2020 will therefore be a blow to them and their families who will need to continue to pay an average of £28,600 per year.”
The delay in introducing the care cap underlines the value of seeking expert advice to help protect assets in a compliant way, to avoid paying more care fees than necessary.
As planning for long-term care costs looks set to become a key priority for many people, Moore Thompson and MT Financial Management can provide expert support to other professional advisers on tax-efficient arrangements as part of broader retirement planning, including business exits, pension provision and savings and investments. For more information, please contact us.