The care home fees cap of £72,000 is set to be introduced in 2016. What is this amazing generosity by the government? Does this mean that we no longer have to worry about selling our homes to pay for care fees? Is this simply a political sop to middle class voters as the Conservatives look to bolster their election chances next year?
The truth is that in reality the Conservatives will be the main benefactors of the Care Act. The government will only pay the care element of care fees once you have spent £72,000, not the whole figure. You will still have to pay the living expenses. So for example, if the weekly care amount is circa £300, the care limit will take five years to reach. Therefore you would need to have been in a care home for five years to see any benefit.
However, there is good news, in that the upper threshold for claims has increased from £23,500 to £118,000, at which point the local authority will pay the care fees. This means that £118,000 is protected, although the local authority will only pay up to a certain level of care home fees, which does not include a luxury care home. Any amount above the local authority rate will still be the responsibility of the patient.
For those who require continuing care because of dementia or another illness needing twenty-four hour care, there is also the option of applying to the NHS for care home funding. This is not automatic, so any application will need to be prepared thoroughly and you have to follow the correct process.
The key to planning for care home fees is to put the necessary controls in place. Firstly you need to make sure that you have prepared powers of attorney both for your financial affairs and for your health and welfare, so your wishes are clearly set out as to both your hospital and care treatment. Your lawyer can also take the best financial advice to create the most tax-efficient plan to pay for care fees, while also maximising your inheritance.
Update: The proposed care cap has now been delayed until 2020.