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Care Costs Cap

Volume 717: debated on Thursday 7 July 2022

The Government are implementing a comprehensive reform programme of adult social care with £5.4 billion investment over three years, building on measures in the Health and Care Act. This includes £3.6 billion to reform the social care charging system and enable all local authorities to move towards paying providers a fair cost of care.

Today the Department of Health and Social Care has published updated operational guidance on implementing the cap on care costs, alongside the Government response to the consultation on this draft guidance. This guidance seeks to support all local authorities in their preparations for implementing our reforms from October 2023.

These changes will end the lottery of unpredictable care costs through the introduction of a £86,000 cap on personal care costs, as well as a more generous means test, raising the upper capital limit from £23,350 to £100,000, and the lower capital limit from £14,250 to £20,000.

The Government’s consultation on the statutory guidance to implement charging reform ran from 4 March until 31 March 2022 and sought views on how a cap on care costs would operate in practice. The consultation received 161 responses, indicating broad support of the policy principles and the aims of our reforms. The feedback suggested that sections of the guidance needed further development to ensure they are clear and workable. We have therefore worked with local authorities and the wider adult social care sector to clarify and expand the guidance in line with this feedback.

The guidance updates the existing care and support statutory guidance (CASS) and covers the following areas:

Cap on care costs (including detail on: daily living costs; what counts towards the cap; the metering process; requesting that the local authority meets self-funders’ needs and cross-border issues);

Independent personal budgets (including detail on: the principles of establishing an independent personal budget; verification of the purchase of care; dispute resolution; and moving from an independent personal budget to a personal budget);

Care accounts (including detail on: what should be included in a care account; care account statements; retention of care accounts; and portability of care accounts).

We have also amended the guidance in response to feedback on the implementation of one specific aspect of our reforms, the extension of section 18(3) of the Care Act 2014.

As announced in building back better, from October 2023 we will extend the right for self-funding individuals to have their eligible care needs met by their local authority, such that they can access care at, generally lower, local authority rates. This is aimed at improving fairness and accessibility, as well as supporting the operation of the cap, which is based on how much local authorities pay for care. We will do this by extending the application of section 18(3) of the Care Act 2014.

The consultation sought views on how best to ensure smooth implementation of this change. Respondents pointed towards a need to mitigate the initial impacts of section 18(3) and a common theme in responses from local authorities was concern about the workability of full implementation from October 2023. They were also concerned about the potential impact on those awaiting care and support, should a large number of people with existing care arrangements already in place approach their local authority to arrange their care at this point in time.

The guidance published today therefore clarifies our intention to stage the extension of section 18(3) over 18 months, so that people entering residential care from October 2023 are initially eligible. Additionally, anybody already living in residential care will be eligible from April 2025 at the latest, and earlier if the market can sustain full rollout. This will be kept under regular review. Section 18(3) already applies to individuals who are receiving care outside of a residential care setting.

Section 18(3) does not affect an individual’s ability to use the cap on care costs; all care users will be able to meter towards the cap on care costs from October 2023. Rather, section 18(3) helps individuals ensure that they pay no more than the metering rate when meeting their eligible needs; the metering rate is based on the fees commissioned by local authorities, and these cannot always be secured by individuals arranging their own care. This means that individuals using section 18(3) from October 2023 onwards need not pay more than £86,000 on getting the personal care they need; their local authority will arrange their care and they will meter towards the cap based on the amount they spend. Everyone who funds their own care will be able to ask their local authority to meet their needs from April 2025 at the latest. People with assets of less than £100,000 do not need to use section 18(3); they will be able to ask their local authority to meet their needs from October 2023, as a result of the extended and more generous means test.

This staged approach to introduction will allow individuals funding their own care to benefit from local authorities’ expertise in commissioning as quickly as possible, while allowing local authorities and social care providers to plan for this change and avoid unnecessary disruption to service provision.

Today’s publication is a further milestone on the Government’s journey to reform adult social care, creating a system that is fit for the future and of which we can all be proud.