A prolonged freeze on the financial threshold for state assistance with social care costs is costing families an average of £12,400 more out of their own funds, a study by the King's Fund has revealed. The current asset floor of £23,250, below which individuals must pay for their own care, would stand at over £35,600 if it had been adjusted for inflation since the 2010-11 financial year.
The King's Fund, a charity and think-tank, described this as a "stealth tax" and urged Prime Minister Andy Burnham to address the issue as part of a broader overhaul of the social care system. An estimated 220,000 individuals in England are considered "self-funders," meaning they bear the full cost of social care, which can amount to tens of thousands of pounds annually.
Furthermore, the report highlights that self-funders often face higher fees than those whose care is funded by local authorities. A 2017 Competition and Markets Authority report indicated a 41% disparity in rates, a gap the King's Fund states has likely persisted. This situation means self-funders not only deplete their savings faster but also retain less of their assets overall due to these elevated charges.
The King's Fund is advocating for the government to revise the threshold for state assistance to reflect inflation, emphasizing the need for a comprehensive review to address access, catastrophic costs, quality of care, and market failures within the social care sector.
Simon Bottery, a senior fellow for social care at the King's Fund, commented that the 15-year freeze on thresholds is symptomatic of an inequitable system resulting from decades of delayed reform. He welcomed Prime Minister Burnham's commitment to drive through necessary changes, noting a renewed impetus from the central government to tackle the issue.
Prime Minister Burnham has previously acknowledged the failures of past governments in managing the care system and has vowed to build a political consensus for its future delivery and funding. While he has not ruled out tax increases or "difficult decisions," he has also expressed a willingness to collaborate with other political parties to find common ground. Baroness Louise Casey has been tasked with accelerating her review of a potential "National Care Service" to run alongside the NHS, with a revised publication date of summer 2027.
In England, individuals requiring care home placement must spend down their assets to £23,250 before becoming eligible for state funding. This often necessitates selling their homes. For care provided in the home, asset levels are determined by local councils, but cannot fall below £23,250, though the value of a person's home is excluded from this assessment. The rules discussed apply to England, with Scotland offering free personal care, Wales employing a different means-tested system, and Northern Ireland having its own distinct regulations.
While the NHS can fund care based on health needs through "NHS continuing healthcare," the application process and associated bureaucracy can be challenging. Homeowners are protected from having to sell their properties to fund care if a spouse, partner, or certain other relatives, such as those over 60 or under 18, continue to reside there.