Opinion: social care cap plans are unfair on the asset poor

The social care cap was supposed to provide certainty over costs and protect the least well off. John Fitzsimons argues that it does neither.

The Government is under fire at the moment over its social care plans, having been accused of trying to sneak in changes that make life harder for people with the fewest assets.

When the Government’s social care plans were first announced, they centred on the £86,000 cap, meaning that there would at least be an upper limit on how much people would have to pay towards their own care.

Clearly, that’s still an awful lot of money, but it does at least provide some certainty about the eventual bill people will face.

Or at least, that was how it seemed.

However, last week the Government published new details around its plan, which included some key exceptions to this cap. 

For example, if you put any benefits that you receive towards paying for care, then they will not count towards the cap. Instead all £86,000 needs to come directly from you, and not include any social support that comes your way.

People with between £20,000 and £100,000 in assets, outside of their main property should someone still be living there, qualify for help from their council towards social care costs on a means-tested basis.

As a result, there will be an awful lot of people receiving some sort of support that doesn’t count towards the cap.

What’s more, living costs are not included. So the associated costs that can come from social care, like accommodation and food, will have to be paid for separately.

Bearing in mind these costs are being set nationally at £200 per week, that’s potentially going to be a very significant additional financial burden.

How to find the right life cover at the right price

Losing more of my assets

The changes have provoked uproar, because they mean a lot of people ‒ particularly those with the fewest assets ‒ will end up paying more.

Where previously the support to which they were entitled would count towards the cap, now every penny of that £86,000 has to come directly from the individual.

That is inevitably going to be a huge ask for those with modest levels of savings, or who live in areas with below-average house prices.

Similarly, the fact that living costs will not count towards the cap is huge. If you spend a long time in social care, then that £200 a week will quickly turn into a mammoth bill.

My own grandmother spent years in a care home after suffering a succession of strokes. This idea that people only spend a short time in care, and so those living costs won’t add up, is cobblers.

Finally, sums spent before October 2023 don’t count towards the cap either.

Despite the uproar, the bill made it through the first vote in the House of Commons ‒ albeit by a narrow margin, with plenty of Conservatives either voting against or abstaining ‒ and it now faces a vote in the House of Lords.

When is a cap not a cap?

Let’s get the pleasantries out of the way. It is genuinely welcome that this Government is attempting to do something about social care, given the way it has been kicked down the road for years.

Indeed, it’s precisely because of that fact that finding a funding solution now is such an urgent task.

But this current idea is a bit of a mess. Having a cap is a completely sensible way of handling things, and while setting an exact level for that cap is always going to cause difficulties, it’s still a useful starting point.

However, a cap only works if it’s an actual cap. You can’t have all sorts of exceptions that don’t count towards the cap, otherwise, it undermines the whole thing.

What’s more, installing exceptions to the cap which actively punish the least well off is an utter disgrace.

The idea that the money paid towards care somehow doesn’t count because it’s come from means-tested support from a local council, rather than the individual’s ISA, is a farce.

Using our homes to pay for care

Our properties don’t always count towards our asset levels. Basically, there is a ‘housing disregard’ in place, which means that if you are receiving care at home, or a loved one like a spouse is still living there, then it doesn’t count.

However, if you live alone and then move into care, then your property is then treated as an asset, which obviously then raises the spectre of it potentially needing to be sold in order to cover that care bill.

This of course goes against the promises made by the Government, that people’s homes would be completely protected from social care.

I fully understand why people get so upset about the idea of having to use their home to pay for social care ‒ there’s no avoiding the fact that it’s obviously an emotionally charged subject.

A proper cap would at least reduce the chances of this having to happen, and if it does ensure that for most people a decent chunk of the money raised from a sale being available to pass on to loved ones.

If anything, the nonsense cap in place now only increases the likelihood that those with the lowest level of assets will have to sell their home.