Understanding the impact of care payment thresholds and social care funding in the UK

What were the proposed changes to care payment rules?

In 2021, the UK government outlined plans to overhaul care payments through their ‘Build Back Better’ plan for health and social care. Key changes included:

1. Increasing Care Payment Thresholds:

   • The lower threshold was set to rise from £14,250 to £20,000, offering more support to individuals with limited savings.
   • The upper threshold was to increase from £23,250 to £100,000, making more people eligible for local authority-funded care.

2. Introducing the £86,000 Care Cap:

   • This cap would have limited the amount anyone would need to spend on personal care over their lifetime.

These changes were initially planned for October 2023, postponed to October 2025, and subsequently scrapped under the new government.

How do current care payment thresholds work?

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The current rules for care funding in England remain unchanged:

• Savings above £23,250: You are classed as a self-funder and must cover all care costs.
• Savings between £14,250 and £23,250: You qualify for partial funding from your local authority, based on a means test.
• Savings below £14,250: Your local authority covers your care costs, although you may still contribute from your income.

A financial assessment determines your eligibility and includes both income and assets. Property is counted if you require care in a residential setting.

What was the £86,000 care cap?

The care cap aimed to set a maximum limit on personal care expenses, meaning no one would need to spend more than £86,000 on care over their lifetime. Once this limit was reached, the local authority would take over funding for eligible care needs.

What Costs Were Included?

• Personal care expenses, such as:
  • Help with dressing and bathing.
  • Medication management.
  • Assistance with mobility or hygiene.

What Costs Were Excluded?

• Accommodation fees.
• Utility bills.
• Meals and housekeeping services.

Regional differences in care funding

The scrapped reforms would only have applied to England, but care funding thresholds vary across the UK:

• Wales:

  • Upper threshold for care home fees: £50,000.
  • Upper threshold for home care fees: £24,000.

• Scotland:

  • Upper threshold: £35,000.
  • Lower threshold: £21,500.

• Northern Ireland:

  • Lower threshold: £14,250.
  • Upper threshold: £23,250.

How does the benefit cap affect care payments?

The benefit cap, which limits the total amount of benefits a household can receive, does not apply to local authority-funded care. However, if you require care in England, you’ll need to pass a financial assessment to determine your eligibility for funding.

Funding options for care costs

Whether you require care at home or in a residential facility, there are several funding options to explore:

1. Local Authority Funding: Available for those with savings below the threshold.
2. NHS Continuing Healthcare: Covers care costs for individuals with severe medical needs.
3. Deferred Payment Agreements: Allows you to use the value of your home to pay for care without selling it immediately.
4. Private Funding: For individuals who are not eligible for state funding.

Would the care cap have affected you?

The £86,000 care cap would have benefited self-funders with assets exceeding £100,000, as it provided a clear limit on care costs. However, individuals with fewer assets would have continued to rely on local authority funding.

The scrapping of the care fees cap has reignited the debate over how to fairly fund social care in the UK. Understanding the current care payment thresholds and available funding options is essential for making informed decisions about later life care.

By staying informed and planning ahead, you can ensure financial security while accessing the support you or your loved ones need.

Q&A: 

1. What is the current upper care payment threshold in England?
The upper threshold is £23,250, above which you must self-fund your care.

2. What was the £86,000 care cap?
It was a proposed limit on personal care costs over a lifetime, set to come into effect in 2025 but later scrapped.

3. Are care payment thresholds different in Scotland and Wales?
Yes, thresholds vary across the UK, with Wales offering the highest upper threshold for care home fees at £50,000.

4. Does the benefit cap affect care funding?
No, the benefit cap does not apply to care funding provided by local authorities.

5. What funding options are available for care costs?
You can explore local authority funding, NHS Continuing Healthcare, or deferred payment agreements.

At Senior Home Plus, we are committed to supporting individuals and families in navigating the complexities of care funding and finding the right care solutions. Whether you’re exploring local authority funding options, private care, or need guidance on care homes, our expert team is here to help. With a wealth of resources and personalized assistance, we make the process of choosing and affording care simple and stress-free.