On 4th July 2011 the Commission on Funding of Care and Support published its findings to the government and had some very interesting proposals regarding how long term care should be funded.
As more of us are living for longer, the question of how we are cared for in our old age is becoming increasingly important. Various studies estimate that the number of over-65s will double over the next 20 years. The number of people over 90 will treble.
How does the system work at the moment?
If you have assets of less than £14,250 you automatically qualify for Local Authority long term care.
If you have assets between £14,250 to £23,250 the Local Authority will contribute to the cost of your care.
If you have assets of over £23,250 you are liable for the full cost of your care.
Why do we need a review of this system?
The current system offers no protection for homeowners. Many people requiring long term residential care will not qualify for Local Authority funding simply because they own the house they live in. They will have spent nearly all of their assets before they qualify for any assistance with their care, leaving nothing to pass to the next generation.
Local Authorities cannot afford to fund this system for much longer. In many parts of the country, services are stretched to breaking point.
What does the Report recommend?
- A cap on an individual’s contribution to the cost of their care, set at £35,000. If the costs of care went beyond this, they would then qualify for state support. This would allow people to plan better for their future, knowing that the costs of care would not spiral out of control.
- To increase the means-tested threshold for funding for residential care from £23,250 to £100,000 to make the system fairer for homeowners.
- People should contribute to their living costs, e.g. food, subject to a cap of between £7,000-£10,000 a year.
The Report recommends these proposals are implemented by 2013, but this is subject to agreement by the government.
The estimated costs of these proposals is £1.7 billion. Whether the government has the means to carry these proposals out in these difficult economic times is a question that has not yet been answered.
Regardless of whether these proposals are carried out, the issue of long term care is something that should be considered by everybody.
At QualitySolicitors Bradbury Roberts and Raby we can provide advice on passing your assets to the next generation, including:
- setting up appropriate Wills
- making lifetime gifts
- creating protective trusts
In addition, it is important to consider who will manage your financial affairs and arrange any funding in the future, if you no longer have the capacity to make those decisions. We strongly recommend that everybody has a Lasting Power of Attorney in place to allow a person of your choosing to help you make decisions in the future.
If you would like advice on any of these issues please complete the online enquiry form or contact Sarah Hirst on 01724 854000.