So, we were right all along. The Social Care Cap IS a con, a false hope distorted with smoke and mirrors. In reality, the new cap does nothing to help those who are not eligible for state help – those who have more than a little put aside – from having to sell their homes to pay for residential care costs and/or seeing the value of their estate destroyed.
Look through the smoke and the reality is a different story, and many people of pension age face paying out significant sums for old age care.
“The government is sneakily shifting the cost of care further and further on to older people and their families,” is how one senior person, in a campaigning organisation which has closely examined the scheme, describes the government’s plans.
While the government was proclaiming that the era of massive bills for care was over, the truth was slowly beginning to dawn on those who looked with an independent set of eyes.
One of the features was that the elderly would be able to pay for residential costs later and avoid having to sell their homes and or face enormous bills. This would be achieved, claimed the government, by councils paying and then reclaiming the costs from an individuals’ estate after their death.
But it is emerging that this option will not be available to wealthier people! Only those needing residential care that have assets of less than £23,250 (excluding the value of their home) will be able to get their local council to pay the costs.
For example, it means someone with £50,000 in the bank when they enter a care home will have to pay the bills as they come in until that has been reduced to £23,250. Only then will they be able to defer the costs.
Additionally, the cap figure of £72,000 does NOT include what are laughingly called “hotel costs”. Under the reforms, these will be set at £12,000 a year. These comprise the day to day costs of food, accommodation and energy bills. For a typical care home place, that accounts for about a third of the fees.
As Nick Triggle of the BBC Health team explained in a piece recently, in real terms, this could equate to a person paying over £100,000 over three years (£72,000 in care fees and £36,000 in hotel costs) before the Cap comes into effect. His figures make disturbing reading.
Now we can see the true costs, he calculates that over, say, a three year period, at £12,000 per year, a total of £36,000 plus the £72,000 of costs before the so-called Cap starts to have effect. Therefore, it would mean that an individual could find themselves paying over £100,000 over three years (£72,000 in care fees and £36,000 in hotel costs) before the cap kicks in – and to compound the issue, the £12,000 per year “hotel costs” will still have to be paid until the estate assets are pared away to the £23,250 floor. AND ONLY THEN will they be able to defer the further costs which will later be deducted from the estate after death.
The end result is that those in the middle range of wealth are the losers. Those at the bottom of the ladder will continue to have their costs paid. And that is supposedly the government’s answer to a fair system.
If your parents have assets of over £118,000 (including the value of property), they will be liable for care home costs until they reach the £72,000 cap or their assets fall below the £118,000 mark.
The BBC analysis has shown that those with assets of between £150,000 and £200,000 face losing between a third and nearly a half of theit assets in care costs.
The wealthier you are the smaller percentage of your wealth you will lose!
The tale of smoke and mirrors however does not end there. It will be up to local authorities to determine how much people pay calculated on the average the local authority pays for care. But care is a commodity like everything else, the more they buy, the better the rate.
Additionally the Cap level seems to have been set on a very hard-nosed basis. It is a sad fact that of those entering residential care, few are alive after more than a few years. In reality, they will die before the Cap level is reached.
One estimate is that only one person in eight will benefit from this so-called social care revolution. As of 15 October a Downing Street spokesman indicated it may be willing to re-examine the £32,250 figure. More smoke? More mirrors?
So now it is even more apparent that families and the elderly look to other remedies, different answers to the issue of their care in later life.
And that is what we will explore in part two of this feature.