What does the coalition £75,000 fees care cap proposal mean?

The coalition £75,000 fees care cap will not be implemented until April 2017 and is not retrospective. It is likely to directly benefit a smaller minority than the publicity implies.

Currently those with capital resources of over £23,250 do not receive assistance and self fund their care. That threshold will rise to £123,000.

The policy affects ‘Care’ costs and not accommodation and food costs (known as the ‘hotel’ component) – with the distinction between the two ingredients not completely clear yet.  On the face of it accommodation and food costs would seem to cover a substantial proportion of the costs of residential care and be an important variable in terms of quality provided. There would be  regional differences.

Having said all of that it is a significant positive change.  The main significance will be creating more certainty which in turn may encourage insurers into the market and make financial planning for care fees more straightforward.  Presently there is a lottery where a minority requiring higher end carer support for a longer period of time see their assets wiped out.  The new insurance products are likely to take time to emerge and require further government clarification.

For advice on care fees planning please contact me.

Mike Dyer
Consultant Solicitor
Private Client Team

0121 243 3156 or send an email to Mike through the Contact Us page.