Duncan Lewis

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Care costs for elderly to be capped at £75,000 with means test of wealth for eligibility set at £123,000

Date: (12 February 2013)    |    

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Governments plans to reduce the cost of long term care by slashing future care home bills for poorest pensioners in Britain would still leave most pensioners having to sell their homes to meet care bills says experts.
The means test for the level of wealth at which individuals have to pay for all their cares has been planned to raise at £123,000 and the costs which the residents have to pay for their care would be capped at £75,000.
The current means test of level of wealth for people to get government assistance stands at £23,500. The means test for this includes property so the reality is that many have to sell their homes to pay for their care.
The changes means that anyone with who has wealth up to the value of £123,000 would receive some state help and it diminishes with the person’s wealth gets closer to £123,000 when they enter care.
The changes will be brought in by 2017 and paid for in part by freezing the Inheritance Tax threshold at £325,000.
The changes are based on recommendations put forward by the independent Dilnot commission two years ago. However, they are far less generous than those proposals, which had argued that the lifetime cost of care met by pensioners should be capped at £35,000 and the means-tested threshold being increased to £100,000.
So the threshold has been increased to an amount higher than that suggested in 2011 and had been up rated to take into account inflation since then, capping care home bills at £75,000 will still mean hefty bills for many. At the moment, 20 per cent of those in care end up paying more than £75,000.
It doesn’t stop there, as there is a separate annual cap of £12,500 on the cost of bed, board, food and heating. So the cost for a couple both requiring residential care for the average two years could still hit £200,000.
The costs cover only for homes which are of specific standard levels that councils are willing to pay. For a nicer home the person has to pay a better price. Nonetheless, the planned changes have been welcomed by age campaigners
International Longevity Centre UK chief executive Baroness Sally Greengross said these measures were an important first step in the right direction. The announcement will help individuals and families who are currently hit hardest by the ever growing cost of care.
Both Deputy Prime Minister Nick Clegg and health secretary Jeremy Hunt have expressed confidence that the changes would stop the 'scandal' of people being forced to sell their homes to pay for residential care.

 

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