Long-term care still a problem

Whilst some of the key issues of long-term care have been addressed by the government in its Care Act, several problems remain.

The main provisions take effect from April 2016, and the new £72,000 ‘cap’ is being heralded as a solution to the problem of people having to pay major sums for care over a long period of time.

The theory is that once someone has spent £72,000 on their own care, all further costs will be met by the state. However in practice things are likely to be different. Most experts believe that local authorities will continue to make assessments – based on their own sets of rules – to evaluate eligibility and what package of care someone is entitled to. So the ‘postcode lottery’ of assessments will probably continue.

On top of that, research carried out by the Centre for Economics and Business Research shows that the average care home resident will die without ever becoming eligible to benefit from the £72,000 cap.

The research points out that the typical resident of a care home stays there for two years and four months, and pays on average a total of £69,000 in fees. A nursing home resident stays for an average of one year and five months, paying £57,000.

Then there is the application of the cap. The cap is only there to cover care costs, not the ‘hotel’ element of residential nursing care - the fees individuals pay to care homes for their bed and board. These do not count towards the cap and will be paid by everyone who has assets above the threshold. Even when the £72,000 cap is reached, residents will still have to pay the ‘hotel costs’, which could be up to £12,000 a year.

With regards means testing, the new threshold below which some help with costs is meant to be provided will be £118,000 in April 2016, but in practice the contributions required towards care will quickly erode capital down to the £23,250 level at which the state pays all the bills.

The Act does require local authorities to offer ‘deferred payment’. This means that costs can be accrued and taken from the sale of property after death. So technically, no-one will have to sell their home to meet care home fees, but it is not ideal.

The upshot is that long-term care is likely to remain a very costly problem for families and yet few families have actually made financial plans to pay for care.

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