Government to cap care fees at £72,000 from April 2016 – Smoke and Mirrors

Government to cap care fees at £72,000 from April 2016 – Smoke and Mirrors

If only it was true!

We commented in February 2013 about what was behind the headlines then – little has changed. The fact is that the cap only applies to spending on the ‘care’ element and does not include so called hotel costs (estimated to average £230 per week). What makes matters worse is that the care element only accrues at the rate that the local authority would pay not the rate that a ‘self funder‘ would pay. The difference being about 20% and in addition does not include top up fees that might be paid for a higher standard of accommodation or service.

Care costs vary depending where you are living but are generally substantially more expensive in the South East. Looking at care costs in the North of England the average paid by a self funder would be £525 per week, if funded by the local authority it would be about £420 per week. In order to reach the £72,000 cap a person would need to be in care for 172 weeks or 3 years and 16 weeks. However during this time their care would actually have cost them £129,860. In this example a difference of £57,860 or an additional 80%. Remember that this example is in a low cost area of the country and does not include top up fees.

Little can be done to mitigate the damage care costs can have on the value of an estate but it may be worthwhile having a word with your independent financial advisor and estate planner.

Simply Wills has an association with a company with skills and experience in advising individuals and their carers about all aspects of long term care and, in particular, the entitlements and rights of those in care. Contact us for details.

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