More people face paying for care as means-test threshold is frozen for 13th year

More people face paying for their care after means-testing thresholds were frozen for a 13th consecutive year, the government announced this week.

The upper capital limit, above which people must pay the full cost of their care (in most cases)*, will stay at £23,250, for 2023-24, said the Department of Health and Social Care’s (DHSC) annual circular on social care charging.

The lower limit, below which people are not charged for care from their assets, though are still liable to contribute from their income, will stay at £14,250.

Both limits have been at those levels since 2010-11, dragging many more people into paying for care than would have been the case had they risen in line with inflation.

Reform delay

The capital limits had been due to rise to £20,000 and £100,000, respectively, in October of this year, under the government’s proposed adult social care charging reforms.

The DHSC said this would have tackled the issue of people with moderate levels of wealth having to run down their assets to pay for care, and would have resulted in an extra 50,000 older people becoming eligible for state-funded care per year.

However, in November, the government announced a two-year delay to the reforms, with the allocated funding recycled to deal with current adult social care pressures, as local authority leaders had requested.

Latest threshold freeze ‘adds insult to injury’

Responding to the latest freeze in the thresholds, King’s Fund senior fellow, social care, Simon Bottery said: “The failure to increase the upper capital limit even in line with inflation adds insult to injury for people needing care services because in October this year it should have risen to £100,000 as part of the government’s charging reforms, which have now been postponed until 2025.

“This would have meant many more people were entitled to some support with care costs. Even if the upper threshold had just risen consistently in line with inflation it would now be around £30,000 rather than £23,250.”

Age UK charity director Caroline Abrahams issued a similar message, saying: “Too many people continue to rely on the goodwill of family, loved ones and neighbours…That’s why we’re disappointed that the DHSC once more has frozen the thresholds for means-tested funding for social care, resulting in many more people going without the necessary funded care, or having less of it than would have been the case had thresholds gone up in line with inflation.”

There was better news for people currently receiving council-funded community-based care, for whom the minimum income guarantee (MIG) will rise by 10% in 2023-24, in line with inflation.

The MIG provides a floor below which a person’s income must not fall as a result of care charges. As an example, for a single person aged 25-66, the  weekly rate will increase from £94.15 to £103.65 from April.

There were also inflationary increases in the personal expenses allowance (PEA) for state-funded care home residents, from £25.65 to £28.25 per week, and the savings credit disregard, from £5.90 to £6.50 per week for individuals and from £8.85 to £9.75 for couples. The latter is an extra sum eligible individuals are allowed to keep above the MIG or PEA.

‘Welcome protection for people receiving care’

Bottery said the government “deserves some credit” for its inflationary rise in the MIG, while Abrahams also welcomed the increases in this, the PEA and the savings credit disregard, saying these would “protect the income of people who have funded care”.

For learning disability charity Mencap, executive director of communications, advocacy and activism Jackie O’Sullivan also welcomed the rise in the MIG but warned that “many people with a learning disability will still be left with too little to live on”.

She urged ministers to “commit to reviewing the sufficiency of MIG levels and to longer-term reform of care charges to make them fairer”.

Prior to the announcement, the Association of Directors of Adult Social Services had raised concerns about the impact on council budgets of rises in the MIG and the capital thresholds.

The government has touted its adult social care funding plans for 2023-24 and 2024-25 as the biggest increase in the sector’s history, claiming it was making up to £2.8bn and £4.7bn available for services, respectively.

Councils face ‘stretched budgets’

However, ADASS and others have questioned these figures, on the grounds that some of the funding is designed to be used for children’s social care and another chunk is dependent on authorities raising council tax by 5% in each year in the midst of a cost-of-living crisis.

Following this week’s announcement on charging policy, ADASS joint chief executive Cathie Williams said: “It is good news and welcome that the MIG has been raised in line with inflation.  Many people drawing on social care will be desperately in need of this to go towards the increasing cost of living.

“Councils will now have to work out how to include this in their stretched budgets for the year to come.”

*Councils must apply the capital thresholds to people in permanent residential care placements, but have the discretion to increase them for people receiving funded care and support in other settings.