Dealing with rising care costs has been one of the biggest problems for many families in the UK in recent decades. Numerous attempts to ‘solve’ the system have been attempted in the past with all sorts of schemes that have been proposed only to be later dropped. However, in 2021, the government finally came up with a new funding scheme. To understand that a little better it is probably worth getting to grips with the old system and what is really meant by care funding.

What Is Care Funding?

Many people associate care funding with elderly care because that is where much of the money goes. However, anyone can be in receipt of adult care – child care services are a very different thing and funded differently, too – depending on their needs. In most cases, care is assessed by a local authority social care team. People with certain conditions, such as mobility issues or Down’s syndrome, might require care as young adults.

In addition, as people become elderly – and more frail – they might need to move into a nursing care home. There again, they might be eligible for funding for care in their own home, something that is offered by firms like Anglian Care, a domiciliary care provider in Essex. The main difference between nursing care and in-home care is that the latter is much less costly and, therefore, requires less funding.

Mature woman comforting senior mom sitting on wheelchair at nursing home. Cheerful woman talking to old disabled mother at elder care centre. Loving caregiver taking care of elderly woman at home.

How Did the Care Funding System Work Before the Changes?

The old system meant that means testing would take place after an assessment of care needs had been made. With a care plan in place, it should be possible to then procure those services either through the local authority directly or, after certain reforms, through private home care providers. The means testing looks at household income and assets – usually the value of the family home and savings, for most people. 

Anyone with assets that exceeded £23,250 was expected to pay for their own care, whether they went into a residential home or opted for domiciliary care. The practical reality of this system meant that people often had to sell their home or part of the equity they had in it to pay for their care. Those who didn’t own their own home usually had to drain their savings until they had assets beneath the threshold.

What Has Changed?

As of October 2021, the government says that people would only need to pay for the first £86,000 of care they receive. Thereafter, local authorities will be expected to find the funds to pay for ongoing care. Although this means that people with assets under the new minimum threshold of £20,000 will still receive their care without paying anything, the current policy protects people with greater assets. 

Given the average house price in the Southeast of England currently stands at around £440,000, this means a typical homeowner can expect to retain £354,000 of the value of their home even if they have to sell equity in it to pay for their care costs. To pay for this system, the Chancellor of the Exchequer will raise National Insurance Contributions (NICs) from April 2022 by 1.25 per cent.

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