The Care Cap 2016
An outline of how the new care cap will impact the overall costs of providing for care
Originally from April 2016 now put back to 2020, there are some changes to the way you pay for, and are assessed for help with, long-term care fees. A £72,000 cap on care costs is being introduced. This is designed to limit the total amount you pay in fees over your lifetime – giving you the opportunity to plan. In reality, however, your outlay is likely to be much higher.
The main reasons for this are:
- The cap applies to direct care costs only and at the Local Authority rate. If your care home charges more than the local authority rate, your actual care costs may be much higher than this.
- The Government expects you to pay around £12,000 a year for accommodation, regardless of how much the care home charges you.
- The care cap only starts to accumulate once your needs have been assessed as being ‘Critical’ or ‘Substantial’ – but you may need support before that.
How much will it cost you for care after you have reached the cap?
After the £72,000 cap has been reached, you will still have to pay between £12,000 and £17,212 per year (£231 to £331 per week) for as long as you live!
For more information about the care cap and for details regarding your own individual position as a partial or full self funder of fees, speak to a qualified Financial Adviser
Source of figures: Laing & Buisson Survey of Care Homes, Care of Older People UK Market Report 2013/14. Please note: all figures are based on average costs for a care home in the UK. Regional variations apply.
Once the care cap is implemented, if you have less than £118,000 in assets, a means test will be applied and your local authority may help with your costs either completely if your assets are below £17,000 or by making a contribution pro rata for assets between £17,000 and £118,000. In these cases, it will take you longer to reach your £72,000 cap. Exact figures for the limits and cap figure may be subject to change and will depend on the level of fees payable to your individual care home.