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The Cost of Care in 2016

The cost of care can be substantial, especially for those who enter the care system with sizeable savings of their own. However, changes to the system are set to come into play in April.

This controversial approach, essentially penalising those who have built up savings over the years, has previously seen the cost of care cap set to £72,000.

What many people assume is that, once the individual receiving care has made payments totalling this amount, the Government will step in and pick up the tab. That hasn’t always been the case, however, the average person has had to pay up to twice that amount before they have become eligible for state assistance.

There is some good news for people in this situation, heralding a significant change to the Care Act of 2014. The previous rules stated that you were obliged to start paying towards the cost of care if you had over £14,250 in assets. This is set to rise to £17,000 before you are required to pay anything.

Cost of Care – The changes

From April 2016, the cap for over 65s will be £72,000. Eligibility criteria means that a council assessment must take place and show that the claimant requires a high level of care. In this event, the council will set a rate which goes towards the cap, whether care is given within a facility or in the individual’s own home. For residential care, the person will still be responsible for their lodging and food when they reach the cap, with a proposed flat rate of £230 weekly. The cap only ever applies to the care element; board and lodging must still be paid for.

It is worth remembering that four out of ten residents in a care home or private nursing home pay entirely for their own care out of private funds; particularly where they have assets worth £300,000 or more.

What does this mean for residents already in care?

This new cap will only apply for direct care costs. Actual care costs may be far greater, and, regardless of the change, the Government expects individuals to provide approximately £12,000 annually for their accommodation costs. The average time to reach the care cap of £72,000 is expected to be around five years. It is best to seek further advice on your personal situation in order to determine the best course of action.

A note on homes

The Government has also said that people should not need to sell their homes in order to afford care, and councils are expected to offer schemes for deferred payment, so that costs are later taken from the estate with a 2.65 per cent interest charge. No one can be forced to sell their home to fund care, although many will choose to do so, especially if their care arrangement is likely to be long term.

If you are considering care homes in West Sussex or Surrey, why not contact our friendly team for further help and advice.

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