The Health and Social Care Levy

What the tax will support

The UK Government proposes to place a cap on adult social care costs in England, stating it will be a ‘seismic change’ to the way care is paid for. Currently, anyone in England with assets over £23,250 must pay for their care in full; a rule the government wish to change.

A cap on care costs and an increased upper capital limit were central recommendations of the 2011 Dilnot Commission and a cap was legislated for in the Care Act 2014 (the Care Act). However, the details of the proposed cap differ from those set out by the Commission.

Sections 14 and 17 of the Care Act provide a unified legal framework for the charging of care and assistance. When a local authority is arranging to fulfil a person’s care and support requirements, it can determine whether or not to charge them for the care on review of a submitted financial assessment (means test).

The proposed reforms provided in the UK Government’s policy paper, Build Back Better: Our plan for health and social care (the Policy Paper) includes:

• The introduction of a cap on personal care costs of £86,000 from October 2023.
• Increasing the upper capital limit (the threshold above which somebody is not eligible for local authority support towards their social care costs) from £23,250 to £100,000 from October 2023.
• Increasing the lower capital limit (the threshold below which somebody does not have to make a contribution towards their care costs from their capital) from £14,250 to £20,000.
• If somebody has capital between £20,000 and £100,000 the local authority may fund some of their care, but they may have to contribute up to 20% of their chargeable assets per year (in addition to their income).
• Increasing the amount of income that care recipients can retain after contributing towards their care costs (the Minimum Income Guarantee and the Personal Expenses Allowance) in line with inflation from April 2022.

The implementation of the above will be at the discretion of the local authority. Therefore, the cap will only cover the costs of a care home or the costs of care at home, which the local authority, not the individual deem suitable.