The Care Act 2014

June 22nd, 2016 by

The following two tabs change content below.
Nicola Sunderland

Nicola Sunderland

Nicola advises on and prepares Wills, Trusts and Lasting Powers of Attorneys. She helps people who are keen to ensure their families aren't left in a difficult position when they die, or if they lose capacity.
Nicola Sunderland

Latest posts by Nicola Sunderland (see all)

The Care Act 2014

The Care Act 2014

The Care Act 2014 came into force from April 2015 and builds on recent reviews and reforms to replace and update the existing law.  Its aim is to provide a consistent approach to adult social care in England and is in two parts:

  1. Part one consolidates and modernises the framework of care and support law. It establishes new duties for local authorities and service partners, while providing new, welcomed, rights for service users and carers.
  1. Part two introduces reforms to the funding system for care and support, including a cap on the amount of care costs that can be incurred by a person during their lifetime. The Government’s concern over how this reform will be funded has meant that this part of the Act has been delayed and is proposed to come into effect from April 2020.

 The Care Act 2014 – Cap on Care Costs

Current rules state that if a person has assets less than £14,250, the local authority will pay for care without a contribution from the individual, other than what they can afford from their income.   If an individual has assets over £23,250, they must pay for all their care costs. Between these two thresholds a contribution towards the cost of care may be due from both the individual and the local authority.

The proposals in part two of the Care Act 2014 introduces a cost-cap of a £72,000.  Once an individual has paid this amount towards the cost of their care, the local authority steps in to fund this element of their care costs ongoing. This is intended to apply to the costs of care only and does not include the costs of daily living (such as accommodation and food).  Even once an individual has paid more in care fees than the cost-cap, they will still have to pay their costs of daily living themselves.

The draft regulations set a notional amount, nationally, of £230 a week for daily living costs.

The following thresholds are proposed to apply:

  • Individuals with assessable assets of less than £118,000 (including their home) will qualify for means tested help with their care costs.
  • Individual with less than £17,000 in assets (where they do not own a home) will contribute what they can afford from their income.
  • One the cap has been reached, the same means test as currently applies will determine what proportion of their daily living costs they can afford to pay themselves.

Despite having wide media coverage about the proposed cap on costs, nothing has of yet changed, and even when the cap comes into effect in 2020, there will be value in obtaining advice on the planning options available to mitigate the impact of care fees.

Sources

  • The STEP Annual Tax Conference (May 2016) The Care Act 2014 presentation by Caroline Bielanska TEP of Holly Meiville-Hawkins
  • Practical Law.com. Costs under the Care Act 2014: Overview
  • NHS.co.uk


Tags: , , ,

Comments are closed.