News & Insights

FAQ: Health & Social Care Reforms

Rob Crowther answers a few brief queries on the recently announced changes to social care.

In a recent policy paper, “Build Back Better: Our Plan for Health and Social Care” the government set out its plans for the long overdue reform to the social care sector. Here are our answers to a few initial questions:

What are the key proposals?

One of the main criticisms of the current system is that the sums that could be paid by an individual are essentially unlimited. This creates a potentially unfair system that means people with, for example, long-term dementia, can end up spending £100,000s purely because of their illness. The proposed new system, amongst other changes, therefore introduces a lifetime cap of £86,000 as well as increasing the threshold below which the local authority will assist from £23,250 to £100,000.

Great, so no-one will ever spend more than £86,000 on their care?

Not exactly. As with all these things, the devil is in the detail. From what has been published so far, it appears that the cap will only apply to personal care costs (i.e., the “nursing” part of care home charges) and not accommodation costs (the “hotel” part). In addition, the cap will only apply to “Eligible Needs”, as assessed by the local authority, which is the same as the current rules, and has a notoriously high bar for qualification.

Wasn’t this addressed a few years ago?

Yes, sort of. The Dilnot Commission identified the need for reform back in 2011, and several changes were legislated for in the Care Act 2014 but, although the changes are therefore on the statute books, they have not been enacted.

So has the government passed a new law?

No, all they have done at this stage is issue a policy paper, which sets out the changes that they envisage from 2023. The proposed changes are still subject to consultation and parliamentary scrutiny, so by no means set-in-stone, and it is ultimately expected that the changes will be introduced under the framework set out in the Care Act 2014.

How will this cap be financed?

As well as the above changes, the government also announced a new tax, the Health and Social Care Levy, which is, broadly speaking, a 1.25 percentage point increase to national insurance. The increase to NI will occur on 6 April 2022 and will be separated out into the separate Health and Social Care Levy a year later.