17th July 2015
The government’s policy to cap care costs will be delayed until 2020.
Costs for care were due to be capped at £72,000 for over-65s from April 2016, in a move that the government said would reduce the burden for families who had an older relative in long-term care.
However, the Department of Health has now said the cap could be delayed for four years until 2020.
It said that it was still ‘firmly committed’ to bringing in a cap but is now concerned that the policy needs a rethink. The change comes after councils wrote to the government asking for the cap to be pushed back due to the ‘enormous pressures’ they face as an ageing population means more people are in care for longer.
In a letter sent to the government, the Local Government Association said the cap would be ‘deeply damaging’ as the current care system was ‘no longer sustainable’. It predicted the cap would add £6 billion to public sector spending over five years.
In a statement, the Department of Health said: ‘In response to concerns expressed by the Local Government Association and many other stakeholders about the timetable for implementing the cap on care costs in April 2016, the government has decided to delay its implementation until 2020.
‘The delay will allow time to be taken to ensure that everyone is ready to introduce the new system and to look at what more can be done to support people with the costs of care.’
Jim Boyd of insurer Partnership said: ‘With an estimated 150,000 people entering care each year, the introduction of the Care Bill was supposed to provide them with a consistent framework in which to make concrete plans around care funding. The delay of the introduction of the care cap to 2020 will therefore be a blow to them and their families who will need to continue to pay an average of £28,600 per year.
‘However, this will come as a huge relief for the local authorities who are reeling under the impact of budget cuts and already face a significant demand for care needs assessments. At a time of fiscal constraint it is not surprising that this expensive proposal has been delayed but the risk is that it may well disappear which may create further uncertainty.
‘At the moment, those who are looking for the opportunity to cap their liabilities but secure a guaranteed income for life while in care have the option to choose an immediate needs care annuity. These products continue to fulfil a critical need – one which is sure to grow as the population ages.’