COVID and the developments on funding social care

In England, the total cost to the public purse of meeting the social care needs of adults under 65 years of age is around the same as that for those aged 65 and over.

The COVID pandemic has added urgency to the social care reform agenda as it is increasingly being realised that the NHS cannot fully recover without coterminous social care reform. According to the latest figures, almost 75,000 disabled and older people and carers are waiting for help with their care and support as social services struggle to cope with an avalanche of needs arising from the COVID pandemic. An unprecedented number of people are reportedly waiting for an assessment of their needs or for agreed care and support arrangements to be put in place. Almost 7,000 people have been waiting more than six months for an assessment.

Reports emerged in July that it was emerging government policy to fund social care through a national insurance rise – a “social care and health levy” - alongside the introduction of a lifetime cap as initially recommended in the Dilnot Review. Earlier this month, this was outlined by the Prime Minister, and Parliament voted in favour of it.

In 2011, Sir Andrew Dilnot’s review recommended a lifetime cap on care costs, which would mean an individual may only be charged for provision of social care upto a specified figure. The principle was accepted by the Government and provision for a “cap” was enacted in sections 15 and 16 of the Care Act 2014. However, no cap has since been implemented.

This Government has put social care reform on the agenda in its election manifesto, which included a statement that “the prerequisite of any solution will be a guarantee that no one needing care has to sell their home to pay for it”. In the Queen’s Speech in May 2021, in respect of the current Parliamentary session, Her Majesty stated “[p]roposals on social care reform will be brought forward”.

Any lifetime cap implemented through section 15 of the Care Act 2014, consistent with the manifesto promise, would be significant when considering the current system for paying for social care provision.

At present, a means-test is applied to determine if someone requiring social care support is eligible for local authority funding support. Care home residents with capital (which may include the value of their home) below £23,250 are eligible for such support but have to contribute their income (and some of their capital if in excess of £14,250) towards the cost on an ongoing basis without limit. Even then, if their income exceeds what a local authority usually pays for a care home place, they may find themselves ineligible for financial help. However, the value of someone’s home is only included in the means-test if they are receiving social care in a care home setting, although it must be disregarded from the means-test if a partner or (in some cases) a relative continues to live there. If it is included in the means-test, then in many cases, a deferred payment agreement can mean that a care home resident does not have to sell their home during their lifetime. However, upon their death, the house is sold, and the proceeds are used to repay the local authority that had been funding the care home place.

For those receiving social care in other settings, such as at home, local authorities can establish their own frameworks for charging (if they decide to charge), which must be at least as generous as the care home means-test. A key difference is that the value of a person’s home is always excluded (or “disregarded”) from the domiciliary care means-test. There is no limit to the amount an individual can spend on social care support during their lifetime, which can lead to enormous social care bills of tens of thousands of pounds for some people. However, if someone qualifies for NHS Continuing Healthcare because their needs are primarily health-related, then both their health and social care costs are met in full by the NHS without any financial contribution required at the point of use from the person receiving the care.

Given the significant financial implications of a cap on care costs for a huge number of individuals, the Government’s proposals for social care reform will be of clear importance.

Leon Glenister is an expert across public law, including health and social care law.

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