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Possible changes to residential care fees for the elderly

Solicitors in London

News article published on: 24th September 2014

There are approximately 3 million people in the UK aged over 80 and it is estimated that this number will double by 2030 and reach 8 million by 2050. As the ageing population continues to grow in size, there will be a greater demand for residential care in the future.

Current position

Paying for residential care is currently means tested and the basic position is as follows: if you have assets worth more than £23,250 (which includes the value of your home although this may be excluded if it is occupied by certain individuals), you are expected to pay the full cost of your care. To fund this, you may be required to sell your home although it is sometimes possible to put a deferred payment scheme in place. This usually involves the local authority funding your care and entering a charge against the property which is repaid at a later date when it is sold.

Recommendations

In 2010, a Commission on the Funding of Care and Support was set up by the Government to review and reform the current system and their findings were published in 2011. They concluded that the current system was “not fit for purpose and needs urgent and lasting reform”. The Commission’s main recommendations were:

Increasing the means testing threshold from £23,250 to £100,000; and

Placing a cap on a person’s lifetime contribution of their care costs at £35,000.

Proposals accepted

The Government has broadly accepted the Commission’s recommendations, although different thresholds have been set, as follows:

Increasing the means testing threshold from £23,250 to £118,000; and

Placing a cap on a person’s lifetime contribution of their care costs at £72,000.

The recommendations have been incorporated into the draft Care Bill which, subject to being passed, is due to come into force in April 2016.

If you would like more advice about care home funding or any other issue relating to wealth planning please contact Emma Sayers by filling in our online enquiry form or calling us on 020 7485 8811

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