Care cap on hold until 2020

A government initiative to cap care costs at £72,000, due to take effect in April 2016, has been postponed until 2020.

In a letter to the Local Government Association on 17 July, Community and Social Care Minister Alistair Burt described the Care Act 2014, the legislation introducing the change, as “historic” but added: “The proposals to cap care costs and create a supporting private insurance market were expected to add £6 billion to public sector spending over the next five years.

“A time of consolidation is not the right moment to be implementing expensive new commitments such as this, especially when there are no indications the private insurance market will develop as expected. I can therefore confirm… we have taken the difficult decision to delay the introduction of the cap on care costs system and that this will now be introduced from April 2020.”

Liberal Democrat MP Norman Lamb, Care Minister in the coalition government, warned that the policy had been “abandoned”. He told BBC Radio 4’s Today programme: “I can envisage no circumstances in which a Tory government in 2020 will see it as a priority to fund this reform.

“The financial services industry will have read this as, in effect, an indication that it’s not going to happen, so all of the work that was under way within financial services to adapt existing policies… will be put on hold because there will be no sense in the industry that this reform is ever going to happen.”

Cllr Izzi Secombe, chair of the LGA’s community wellbeing board, said: “In an ideal world, we would have funding for both the system and the reforms but we have to be realistic about where scarce resources are needed most. Any money from delaying the reforms must be put back into adult social care services and support putting it on a sustainable footing.”

Caroline Abrahams, charity director for Age UK, said the government was right to delay the care cap as its top priority should be to stop the social care system collapsing completely and urged it to use its autumn spending review to introduce effective solutions, including “significant investment to fill the funding gap”.

Jim Boyd, director of corporate affairs at care annuities specialist 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.”

Lee McClellan, a partner in Palmers’ Older Client department, who advises on long-term care issues, said: “This will be very disappointing news for many elderly people and their families, who had seen the care cap as offering some limited light at the end of the tunnel in terms of easing the care cost burden.

“The delay in introducing the care cap underlines the value of seeking expert legal advice to help protect assets in a compliant way, to avoid paying more care fees than necessary. For more information, please contact our Older Client team.”