Cap on care costs postponed until 2025 – what you need to know
It has been announced that the government’s introduction of a cap on care costs has been postponed until October 2025.
The proposed cap was originally announced in September 2021 as part of Boris Johnson’s plan for health and social care and was due to be implemented in October 2023.
Designed to ensure that nobody pays more than £86,000 for social care in their lifetime, this cap would ensure that the government steps in to cover costs beyond this threshold – its postponement means that people will have to wait a further two years to benefit from the scheme.
With the news of the postponement to the cap on care costs, you may be tempted to place assets into a trust or make significant gifts in an attempt to avoid future care fees. However, it is important to note that such arrangements fall foul of deprivation of assets rules. - In the event of you requiring care in the future, the value of the assets you have deprived yourself of may still be included as yours when calculating your means to pay for your own care.
We therefore suggest that you focus on ensuring that, in the event that you do require care, you have people that you trust who are legally authorised to help you manage your affairs. This can be done by making Lasting Powers of Attorney (LPAs) for both your property and financial affairs and your health and welfare. These are important documents which authorise your chosen attorneys to be able to deal with things such as your property, bank accounts, pensions and make health decisions on your behalf. They ensure that people you trust and who know you well can help you if you need it.
The common misconception about LPAs is that they are only appropriate for those individuals already experiencing health issues. We frequently hear from clients “I don’t need these yet” but the issue is that if you wait too long to put LPAs in place then the opportunity may be missed. If you reach the point where you are unable to understand the documents then an application to Court will need to be made for a court order to appoint someone as your deputy to deal with your affairs.
Unsurprisingly, such applications are costly, time consuming and only add to what is already a stressful time for an ill person’s loved ones. In the absence of an attorney or deputy, decisions regarding your care would need to be made by the local authority and/or social services who won’t know you like your family or friends.
It is also often assumed that LPAs are only for those in their later years to consider and that if one of a married couple were to fall ill then the other would automatically be able to deal with things on their behalf – this is not the case. Marriage does not give you the authority to manage your spouse’s finances and anyone, regardless of age, may experience an accident or illness meaning they need help.
We liken LPAs to insurance policies – you hope that you will never need to call on them, but by having them in place you have the peace of mind that, should the worst happen, you have people you trust who can deal with things for you. If you have insurance in place for your car, property and pets why not ensure that your own financial and physical wellbeing are protected?
Contact Rebecca to discuss this further.
