Residential care capital limit increases in Wales

Posted by Ben Coulson on
The Welsh Government has advised that people in residential care in Wales, will see their capital limit increase from £30,000 to £40,000, meaning that they will be able to retain a further £10,000 of their capital (or savings) before having to pay care home costs.   

In recent years, the Welsh Government has announced a number of reforms relating to social care and the way residential care is paid for. One of the main reforms is a pledge to increase the capital limit - used to determine whether a person self-funds the full cost of their residential care, or whether they receive financial support towards their residential care from their local authority - from £24,000 to £50,000.

The increase is being delivered in a phased approach, which started in April 2017, when the limit was increased from £24,000 to £30,000. From April 2018, the capital limit has been increased further, from £30,000 to £40,000. This means that people in Wales can keep an additional £10,000 of their savings before having to pay for residential care.

What is a capital limit and how does the capital limit affect me?

The capital limit determines whether a person pays for the full cost of their residential care, or whether they receive financial support towards the cost from their local authority. In Wales, this means that if you have capital above £40,000, you will have to pay all of the care home fees. If it is below £40,000, you will be eligible for financial support from the local authority.  

What is a capital?

In this context, capital is a person's savings, investments and the value of the property a person owns – unless a partner, ex-partner or dependent relative still lives there, in which case, the house is disregarded.  

What affect has this capital increase had on the people of Wales?

There are about 4,000 care home residents in Wales who pay the full costs of their care. Some 450 care home residents have already benefitted from last year’s increase and this number is set to grow with the Welsh Government's latest increase. The Welsh Government estimates that increasing the capital limit to £50,000, will ultimately benefit a quarter of the 4,000 who currently pay the full cost of their care. 

How does this capital limit compare to other home nation Governments?

The capital limit in Wales is the highest in the UK. In comparison, in England, people with capital above £23,250 have to fund all of their residential care. The limit in Scotland is £27,250.

This is welcome news for people and families requiring residential care in Wales and will ensure that residential charges will not affect the quality of that person's life or their inheritance ear marked for the next generation. 

About the Author

Ben Coulson is a private client lawyer specialising in wills, probate administration, tax and trusts.

Ben Coulson
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