Planned Reforms To Care Home Funding

You may have seen in the media that there are planned reforms to social care funding and as a consequence care home funding and fees. These reforms should be implemented from October 2023.

Care fees cap

The most talked about part of the government’s reforms is the care fee cap. Most people are under the impression that once you have spent £86,000 on care home fees you won’t be paying for care anymore, this is not going to be the case. Also, many people believe that care home fees that have been paid prior to October 2023 will be taken into account, and again that won’t be the case.
From October 2023, there will be an £86,000 personal cap on the amount that an individual will pay towards their personal care and support needs over their lifetime. This is subject to the eligibility criteria set out in the Care Act 2014.

Once the cap has been reached, the local authority will be responsible for funding care services for that individual’s eligible needs.

The eligibility criteria consist of the adult needing care and support due to a physical or mental impairment or illness. As a result of this, there are specific day-to-day tasks that the adult is unable to achieve, this includes if they require assistance to achieve that daily task and if that task is not completed then there would be a significant impact on the adult’s wellbeing.

It should be noted that only amounts paid towards the cost of eligible care needs count towards the cap. Daily living costs (for example rent, food, and utility bills) will not count.

In respect of care home fees, the daily living costs that will be discounted from the overall fees has been set at £200 per week (this is subject to change and has only been set for 2021/2022). Additionally, any extra services will not count towards the cap and it is likely that care homes and care providers will set out their prices separately into personal care costs and other costs. We are yet to see what this will look like in practice.

Changes to financial limits

Currently, once someone’s assets reach £23,250 the local authority will make a means-tested financial contribution towards that person’s care. Once someone’s assets fall below £14,250 the local authority will fully fund that person’s care (taking their income into consideration).

From October 2023, the upper limit will increase to £100,000 and therefore more people will be entitled to a means-tested financial contribution from the local authority and most people who are currently in care are likely to be in a position where they require a financial assessment. The lower limit will also increase to £20,000.

Care Home Placements

The rollout of section 18(3) Care Act 2014 will allow self-funders to get the local authority to organise their care in a care home. This will allow individuals to take advantage of the local authority’s agreed rates which are normally much lower than the self-funder rates.

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