Capping adult care costs: Further detail revealed

Further details around the planned changes to the social care system have been published in a policy paper following the announcements by Prime Minster Boris Johnson in September. 

In “Build Back Better: Our plan for health and social care” the government revealed its intention to launch the “Health and social care levy” to invest £5.2bn in adult social care to deliver funding and system reform. The announcement indicated that from October 2023 the most anyone will have to pay for personal care will be £86,000 to reduce the risk of “unpredictable or unlimited care costs.”

Anyone with less than £20,000 of assets will get free care and people with less than £100,000 of assets will see their care costs subsidised, 4 times the current limit of £23,250.

The policy paper outlines some key exceptions to note:

  • It was thought that the benefits people used to help pay for care would count towards the cap, but yesterday the government said they would be excluded.
  • It also confirmed that the cap will not cover living costs, set at £200 a week, which people will continue to have to pay for life, or until their assets are eroded far enough to qualify for help.
  • Only the money the local authority assesses people need to spend on care will count towards the cap.
  • Nothing spent before October 2023 will count either.

The health and social care levy will start as a 1.25% rise in National Insurance from April 2022. The tax on share dividends will also go up by 1.25%. From 2023 it will become a separate tax on earned income appearing on payslips as “Health and Social Care Levy,” compared to the similar ability councils have to raise extra money through an “adult social care precept” since 2015. The levy will also include those working above state pension age.


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