Government scraps long-awaited cap on social care costs to help tackle spending ‘black hole’

The reform agenda was conceived 13 years ago by an independent commission – led by economist Sir Andrew Dilnot. It was enacted in the Care Act 2014, with its implementation delayed from 2016 until 2020 and were subsequently scrapped by Theresa May’s government, in 2017. In September 2021, the-then Prime Minister, Boris Johnson, revived plans for the £86,000 cap as from October 2023, but it was kicked into the long grass by Jeremy Hunt following the Liz Truss ‘fiscal event’, with a new date of October 2025. The Chancellor’s statement now sounds the death knell for the reforms.

The cap would have introduced an £86,000 limit on the amount anyone in England would have had to spend on their personal care. Personal care relates to support with things like washing, dressing, mealtime assistance and managing health problems. For those who move into a care or nursing home, it does not include things like rent, food and utility bills.

It was also proposed to increase the upper capital threshold, above which people are charged for their care, from £23,500 to £100,000, allowing many more people to claim state-funded support. The lower capital threshold, below which people make no contribution to their care from their assets, would have increased from £14,250 to £20,000.

With the news of the scrapping of the proposals the current rules will remain in place – anyone with savings over £23,250 must pay the full cost of permanent, temporary respite or nursing home care. If your assets are below £14,250, then the local authority will pay for your care costs. Any income you do have will be used to pay part of your care fees. If your assets fall between the two, you may be eligible for some help from the state. Accordingly, many families find their assets are swallowed up entirely by care home costs.

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