Government reinstates cap on care costs change that cuts benefit to less well-off

Minister says basing cap on individual contributions, rather than full cost of personal care, is fairer, but think-tank warns it will leave some with low levels of wealth facing 'crippling' bills

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The government has reinstated a change to the cap on care costs that will reduce its benefit to less wealthy people.

The House of Commons yesterday overturned a vote in the Lords that would have ensured that people’s full personal care costs – not just their client contributions – counted towards the cap, as is currently legislated for in the Care Act 2014.

Yesterday’s vote on the Health and Care Bill would amend the Care Act to only count the client contributions of people receiving means-tested support towards the £86,000 cap, due to come into force in October 2023.

The change will need to be endorsed by the Lords – where the government does not have a majority – when the bill returns there shortly as the two houses need to agree a final version of the legislation before it becomes law.

‘The fairest version of the cap’

The government has estimated that its amendment, which it first inserted in November 2021, would save about £900m a year on the cost of the care cap, which will be introduced alongside a more generous means-tested system for funding care.

In yesterday’s debate, health minister Edward Argar said its plan was also fairer than that legislated for under the Care Act.

“The government believe[s] that the fairest version of the cap would be based on what people contribute towards their care, rather than our counting local authority contributions as well,” he said. “It simply cannot be fair that two people living in different parts of the country, contributing the same amount, progress towards the cap at different rates because of the differences in the amount that their local authority is paying.”

However, think-tank the Health Foundation said the change would make the cap “far less fair and generous than originally expected”, and leave some less wealthy people facing “crippling” costs.

‘A backwards step’

Director of policy Hugh Alderwick cited research it had carried out with the Institute for Fiscal Studies, which showed the amendment would hit older people in the second poorest fifth of the population – and those living in the North East, Yorkshire and the Humber and the Midlands – hardest.

“This is not levelling up: it’s unfair and a backwards step,” he added. “The country is already facing the biggest hit to household finances since the 1950s – and this change in how the care ‘cap’ works risks providing another blow to poorer households.”

The government also overturned a Lords vote to bring forward the implementation of the cap to April 2023, in order to maintain its planned October 2023 start date.

However, ministers made a concession on another amendment by peers, which would have required NHS bodies to consult current or prospective carers of hospital patients before hospital discharge to determine whether they are willing and able to provide care, where they have safety concerns around discharge.

This would have retained a provision similar to that provided for by schedule 3 of the Care Act 2014, the legal regime for tackling delayed discharges, which the Health and Social Care Bill is due to remove as part of a shift to a discharge-to-assess-approach.

Concession on carer involvement

While removing the Lords amendment, the government inserted its own, which Argar would said would achieve the same purpose.

“It will introduce a new duty on trusts and foundation trusts to involve carers during adult discharge planning,” he said, adding that it would apply to young, as well as adult, carers, unlike schedule 3. Argar said that the provision would “ensure that patients and carers are involved in discussions about post-discharge care as soon as they start”.

Carers UK welcomed the amendment. Chief executive Helen Walker said: “Unpaid carers shared their experiences with us and our evidence has shown how devastating hospital discharge can be for carers if they are not consulted, involved or given the right information and support to care safely and well.

“We are delighted that they will now be involved as soon as is feasible when planning for the patient’s discharge begins. We look forward to working with government and the NHS to ensure that this is delivered well for carers.”

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3 Responses to Government reinstates cap on care costs change that cuts benefit to less well-off

  1. Captain Fog March 31, 2022 at 5:09 pm #

    I agree with the Government on this. It seems somewhat perverse that money that acquired from local authorities assistance (arising from other tax payers) should be counted as money towards a cap on personal contributions. The government’s position is equalising the position regarding personal contributions which is surely what the focus is here rather than what seems to be more a political statement about the fairness that some people have more wealth in their prime than others.

    The risk of taking the Lords approach is that everyone will be taxed more – particularly younger people impacting on their ability to achieve financial stability.

    What is also forgotten in this debate is that any inheritance wealthier individuals leave will be taxed via inheritance tax so wealthier people’s inheritance will pay more of their estate in tax on top of any social care payments they make.

    As long as the quality of care offered to everyone is equal regardless of personal wealth that is what is really important.

  2. Anonymous April 1, 2022 at 7:32 am #

    Good luck getting this to work, the priority in asc departments is never going to be self funders with safe and stable packages of care; especially when there are already 100s of individuals waiting for assessments

  3. Stephen Corlett April 1, 2022 at 8:01 pm #

    What none of the national politicians seem to have understood is that there are two separate issues here. One is whether it is right for the charging reforms to be almost wholly focused on protecting the assets of people with savings or houses, when the 2015 proposals and the Dilnot report envisaged reforms that would benefit all service users, including those who don’t have savings or property. The other is whether the _mechanism_ recommended by Dilnot was a fair and efficient way to achieve that. And it wasn’t. It would have had multiple perverse consequences. For instance it would sometimes have meant that someone whose family carers provided most of the support which they needed, and who relied on the state only for a few hours of support each week to give them relief, might have carried on paying charges for many years, while someone who relied entirely on publicly-funded services might quite quickly have reached the cap and stopped paying. Keeping track of what had been spent on a person, and resolving disputes about how much of it should count towards the cap, would also have been a bureaucratic nightmare.

    What would have been much simpler, fairer, and more immediately valuable for disabled people on low incomes, would have been a more generous income-based means test, rather than a peculiar attempt to included them in a scheme designed to protect people with assets.