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A cap on care fees will never happen

Posted on 7th September 2016

You may remember that the Coalition Government introduced a cap on care home fees so that no person would ever have to pay more than £72,000 for care throughout their entire lifetime.

The political parties were responding to the anger of voters who felt that the elderly should be entitled to free social care in the same way that they have free medical treatment under the NHS. Many people felt aggrieved that their life savings would be used to pay for their care rather than being passed on to their children.

In response to this, the Coalition Government passed the Care Act in 2014 and the new cap was due to come into force in April 2016.

The small print of the Act explained that the cap only applies to payments for care, and not to payments for accommodation and food. The sum of £12,000 per year was to be deemed to cover board and lodging and would be always be payable by the care home resident.

Example – George moved to a care home in April 2016 and pays fees of £36,000 per year. The cap only applies to the care element which is deemed to be £24,000 per year. Therefore, George must pay care home fees for 3 years before the cap of £72,000 is reached. He will then have paid a total of £108,000 in care home fees, of which £72,000 was for care, and the Local Authority must then pay for George’s care for the rest of his life. George will however still have to pay £12,000 per year for his board and lodging.

The introduction of the cap has now been officially put back to 2020 but the truth is that the cap will probably never come into force. The reason for this is that the additional financial burden of care costs which was estimated at over £1 billion each year and many Local Authorities are already struggling with severe budget deficits. The current system for adult social care is under enormous pressure as the need for care grows each year while at the same time the level of public funding for elderly care decreases each year.

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