Finance

No 10 to scale back social care support for poorer households

Boris Johnson’s government has significantly scaled back the social care support it plans to offer poorer households in a move that will hit pensioners with lower-value homes.

On Wednesday, the government published details of its social care cap, introducing technical changes that mean those with total assets below £185,000 will pay more than initially thought for social care when the new rules are introduced in 2023.

Under the new plans, lower-asset households will have to pay a proportion of their care costs for longer before they hit a cap of £86,000, after which state support kicks in. The change is the result of removing means-tested support from the government’s calculation of the cap.

Under the proposals, pensioners with high priced homes — such as in the leafy south-east of England — can expect to receive more insurance for their care costs than those in Red Wall constituencies in the north of England.

The system of working out private spend on social care used by the prime minister’s office and the health department was described as “unfair” in proposals put forward by Sir Andrew Dilnot’s review a decade ago and will require an amendment to existing legislation.

Torsten Bell, chief executive of the Resolution Foundation, said: “The big change is to reduce how much protection the cap provides to those with fewer assets, by making it less likely that they could benefit from the cap”.

Liz Kendall, shadow social care minister, said: “This small print, sneaked out today under a cloud of Tory sleaze, shows Boris Johnson’s so-called cap on care costs is an even bigger con than we initially thought.”

In September, Johnson said he had solved the social care problem by accepting the Dilnot reforms that would end the current system under which people with very high needs would have to use up all of their assets, including their homes, on care costs.

The government promised the cap of £86,000 in total care costs that anyone would have to pay before the government stepped in, thereby providing social insurance. It increased national insurance by 1.25 per cent for both employees and employers to fund the changes and increase NHS spending.

But those familiar with the discussions within government said that to save £0.5bn a year the Treasury insisted that poorer people will need to shoulder a greater burden of their care costs.

Those with homes worth about £100,000 and significant social care needs will be worst hit by the move.

Under the current system, people in this group would spend almost 90 per cent of their assets in care costs, rather than 45 per cent as outlined under the government’s original plans, according to social care experts.

The proposal, which MPs will have to vote on in coming days, threatens to break the Conservative manifesto promise that people would not have to sell their homes to pay for care costs.

Richer pensioners who are not likely to be eligible for any means-tested support will be unaffected by the change and will still see the full benefit of the new social insurance system.

Officials said the move would mean “people with less than £100,000 of chargeable assets will never contribute more than 20 per cent of these assets per year” on their care costs.

They added that the planned changes to the cap were designed to “reduce complexity”.

The paper did not comment on the additional burden on poorer pensioners that were created by the new plans.

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