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Majority of people paying for social care won't benefit from current cost cap proposals, says Independent Age

Independent Age

6 min read

Nine in 10 people who pay for their own care in England won’t benefit if the ‘cap’ on care costs, currently set at £72,000 goes ahead, finds new research from Independent Age.

Looking for a long-term solution to the problems in England’s social care system is a well-trodden path. Governments of all political stripes have tried to follow it.

However, trying to identify a fair and affordable means of capping individuals’ care costs has been the Holy Grail.

Few need reminding that finding a fix to some of the problems in social care proved politically tricky territory at this year’s General Election. The Prime Minister had to row back on the Conservative Party’s manifesto, which characterised a previous plan for a cap as too narrowly focused on a “small number of wealthier people”. Four days after she launched the manifesto, Theresa May famously set out the Government’s commitment to a lifetime limit on care costs, but by then, some of the political damage had already been done.

The Conservatives aren’t the only party in Government to have been stung the moment they proposed a major new solution on adult social care. In the past, Labour governments too have sought (but also failed) to achieve a major breakthrough on finding sustainable funding for a system many regard as precarious and getting worse.

But where there’s a will, there’s a way, and 86% of MPs in England recently responded to an Independent Age and ComRes survey stating they agree that a cross-party consensus is needed for a lasting settlement on health and social care.

So ahead of the Government’s promised consultation, now expected sometime in 2018, Independent Age have partnered with the Institute and Faculty of Actuaries to look again at the questions that were so controversial in the election debate on paying for care.

The new report, Will the cap fit? What the government should consider before introducing a cap on social care costs sets out both organisations’ view that introducing a limit on the amount individuals have to contribute towards their own care is the right way forward. It introduces an element of social insurance for one of the last uninsured – but also, most catastrophic – of all risks: the risk that by living for long enough, we may go on to develop serious care needs that cost far more than anything we could have planned or saved for.

But here’s the real question: what level should care costs be capped at, recognising the pressures on the public finances?

The Care Act 2014 legislated for a cap set at £72,000. Originally planned for 2016, and then later delayed to 2020, older people and their families are still waiting for a clear plan. To help facilitate further debate, the Independent Age and Institute and Faculty of Actuaries report presents new insights on the impacts that different approaches to introducing a cap, and changing the means-test in England’s publicly-funded system of social care, could have on pensioner households who need different levels of care.

And the findings should give Ministers pause for thought as they use the coming weeks to develop a new year call for evidence on care ‘caps’ and ‘floors’.

• A £72,000 care cap would only be of limited value because it would only see 1 in 10 who pay for their care costs benefiting from the cap.

• Under the Care Act plan, it would typically take a pensioner over six years to reach a care cap, which is roughly double the average life expectancy for someone in residential or nursing care. A £35,000 cap (recommended in 2011 by Sir Andrew Dilnot’s Commission on Funding of Care and Support) would nominally be reached in approximately two to three years, however, and benefit around 4 in 10 who pay for their care costs.

• Since the care cap in the Care Act (and Dilnot’s plan) excludes daily living costs and ‘excess’ fees that private payers pay above any rate a local authority would be willing to pay for their care, total accumulated care costs rise above £150,000 by year 6 and £300,000 by year 10 under both a £35,000 and a £72,000 cap.

The key from recommendation Will the cap fit? is that the £72,000 cap should be reset to a level where individuals can plan for an average length of care with high need, with the government supporting any further cost. It should also be reframed, the two organisations argue, to include all costs so that individuals know the total amount they are likely to spend on care. Independent Age and the Institute and Faculty of Actuaries call for an ‘all-inclusive cap’ set at £100,000.

It would kick-in, they state, at around Year 3, around the same time as the Dilnot Commission’s suggested £35,000 cap; but it would also reduce complexity within the system by being a truer ‘cap’ on all care costs.

And reducing complexity has to be one of the main aims in a system now characterised by how confusing it is to the people who need it, often at very difficult times in their lives.

Liberal Democrat Health Spokesperson, Baroness Jolly has commented on the findings, saying:

"There are very few families with relatives over 70 who do not worry about the “What if ....” question. “What if mum or dad need to go into care? How long would their money last before we have to sell the house? No one really thinks that someone with limited means and assets should have to pay for their care, but there is still a debate to be had about who should have to pay for care and when and how much. This proposal takes a novel approach and lumps together the care and hotel costs and proposes they should be capped at £100,000. I welcome the report and also the opportunity to debate the issue again, but I fear the PM and the Chancellor have cloth ears and I am not optimistic of any movement in this direction from either."

There is clearly an appetite for reform. The 2017 General Election saw social care funding feature as a key debate topic, a status not afforded to it in the past. The government needs to prioritise this issue and it now needs to act. As the system stands, there is far too much uncertainty and no meaningful way in which future and current care recipients and their families and carers can plan for what can be potentially extremely high care costs.

Edward Argar, Conservative MP for Charnwood has responded to the report, saying:

"With welcome advances in medical science meaning more and more people are living longer, it's vital that as a country we continue to debate and find a way forward on how best we can meet that increased need for care and support in a sustainable way, and particularly how we ensure those with high care needs are protected from potentially very high care costs later in life. 

This interesting new research from Independent Age is an important contribution to that debate, setting out different options which should be reflected on. Next year the Government is expected to publish a Green Paper on social care for older people, and I look forward to it taking forward the debate on how older people in Charnwood, and across the country, can access and afford the financially sustainable, high quality care that they need and expect in the decades ahead."

You can read the full Will the Cap Fit report here

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