Latest update on paying Care Home fees – the £72,000 cap

We hope the Government has settled down on the rules ? the latest for clients in England & Wales is a ?care element? cap of ?72,000 from April 2016. Until then of course nothing much will change.

Whilst this may sound like a big improvement, you should not be celebrating because it is still going to mean the vast majority of us will have to pay our own way, the key change is the calculation.

The Government have said the maximum anyone should pay for ?the accommodation or hotel element? of being in care is ?12,000 p.a. so that is ?230 per week. If you are paying ?600 a week in a Care Home, they may well determine the ?care element? of the weekly cost as being the difference, i.e. ?370 per week, so if you divide this into ?72,000 you will need to be in care for 195 weeks, that is 3 years and 39 weeks. If?the?client is in care for this long he/she will have spent an absolute fortune:

Accommodation/hotel element????? ?230/week??????? ?11,960/pa????????? ?44,850/3yrs & 39wks

Care cost element?????????????????????????? ?370/week??????? ?19,240/pa????????? ?72,150/3yrs & 39wks

As the client?s assets are spent, the rate of spending slows up when the capital gets down to ?123,000, then tariff income will start. At present it is at the rate of ?1 per week for every ?250 between ?14,250 and ?23,250 so this starts at ?36/week and decreases as time goes by.

In future this will be ?1 per week for every ?250 between ?17,500 and ?123,000, so at a starting rate of ?422/week. See the difference?

The real answer to all of this is ‘in the numbers’, and it seems to be quite clear to us that pretty much everyone is still going to be worse off, i.e. no real winners. Please contact us if this concerns you as we may be able to help you.

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