Peers overturn government cap on care costs change for second time

House of Lords rejects amending cap to only count client contributions - not full cost of personal care - and also backs free care for disabled people under 40

The front cover of the Care Act 2014
Photo: Gary Brigden

The House of Lords has rejected – for a second time – a government change to the cap on care costs that would reduce its benefit to less wealthy people.

Peers also introduced provisions to bring in free care for disabled people aged under 40 in a vote on the Health and Care Bill yesterday.

The vote came a week after the House of Commons reinstated provisions that would only count client contributions – not the full cost to the local authority of meeting a person’s eligible care needs – towards the £86,000 cap, where a person was receiving means-tested support. This would reverse the position legislated for in the Care Act 2014.

Think-tanks the Health Foundation and the Institute for Fiscal Studies found that this change would hit people in the second least wealthy fifth of the wealth distribution – and those living in the North East, Yorkshire and the Humber and the Midlands – hardest, leaving some still at risk of “catastrophic” care costs. The purpose of the cap is to reduce this risk.

However, the government has insisted that its proposals – including making the existing means-tested charging system more generous – would benefit everyone and that the alternative approach would cost an extra £900m a year.

‘Only affordable plan on table’

In yesterday’s debate, junior health and social care minister Lord Kamall said the government’s plan was the only “affordable plan on the table”, adding that if it accepted the opposition’s approach, it would need to make its funding reforms less generous in other ways.

“To make the same level of savings we would have to raise the cap, reduce means-testing support or expect people to make contributions towards their daily living costs that are unaffordable from most people’s income,” he said. “None of these are desirable options.”

He also said it was the only fair plan, as the alternative would involve people in different parts of the country, contributing the same amount towards their care, hitting the cap at different times based on how much their local authority was paying.

However, moving the opposition amendment, Labour’s Baroness Wheeler said: “The savings that the government are aiming to make by reducing eligibility for the care cap and not allowing local authority costs to accrue towards the cap will result in older and poorer people in some of the most deprived areas of the country, and working-age disabled adults, paying more towards the cost of their care, particularly those with life-long conditions.”

Her amendment won backing from disability campaigner Baroness Campbell, who particularly cited the provision to provide free care for disabled people under 40. This has echoes of the provision from the 2011 Dilnot Commission report – which first proposed the cap – that people who acquired care needs before they turned 40 should face a zero cap throughout their lives.

Disabled people ‘in crisis’

“Hundreds of thousands of disabled people in Britain are in crisis because of the ever-increasing cost of living,” said Campbell. “Local authorities in England are imposing stricter charging policies for care because they are basically running out of money. Disabled people are already being referred to debt collection agencies because they cannot pay their care charges.

“The government talk about levelling up for disabled people, but really they are doing the opposite. These charging reforms force them to contribute to their care and stop local authority care costs counting towards the cap. They deny disabled people the life opportunities that others take for granted.”

Wheeler’s amendment would also require the results of pilots of the funding reforms by five authorities to be presented before Parliament, and a further impact assessment on the reforms made, before their implementation.

Government to stand firm

The Health and Care Bill is at the so-called ping-pong stage, where the two Houses of Parliament are seeking to agree a final version of the bill to enable it to become law. It will return to the Commons after the Easter Recess on 19 April.

In a statement following the vote, the Department of Health and Social Care made clear the government would seek to reimplement its preferred version of the cap at this point: “Our social care charging reform proposals provide a limit to the cost of care for everyone and strike the right balance between public contributions and people’s personal responsibility for planning for their care.

“They are necessary, fair and provide certainty and reassurance so people can both plan for their future and pass on more of what they have saved to their loved ones.”

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