Local Government Social Care

Update on paying for care reforms

23 July 2014

Article by Amy Clifton, National Assembly for Wales Research Service

The Care Act 2014 in England, like the Social Services and Well-being (Wales) Act 2014, became law in May 2014. However unlike the Welsh legislation, the English Act sets out plans to reform the way in which people in England contribute to the costs of their care. This post looks at the English plans and the latest developments in Wales.

Image from Flickr by 401kcalculator.org. Licenced under the Creative Commons.
Image from Flickr by 401kcalculator.org. Licenced under the Creative Commons.


From April 2016, the Care Act could introduce a cap on care costs which aims to provide protection from “catastrophic care costs”. The UK Government has opted to set the cap at £72,000, whereas the Dilnot Commission recommended £35,000.

The cap includes the costs of both care homes and home care, and is the maximum amount that people will have to pay in their lifetime to meet their “eligible needs” (which are determined by an assessment). Once that cap is reached, the local authority will have to pay all further care costs (related to eligible needs). The local authority will assess what these costs are, and if people choose to receive additional or more expensive care, then they can pay the difference.

The cap will not cover “general living costs” for those in residential care, such as food, energy bills and accommodation. This will be set at £12,000 per year. The rationale given for this is that people receiving care at home still have these outgoings.

The UK Government has also increased the means test threshold;

Currently, assets below £14,250 are disregarded in the means test, and people with assets between £14,250 and £23,250 receive some financial support according to a sliding scale. The new capital limits will be £17,000 and £118,000.

Points to note

  1. The intention is that the cap will operate from April 2016. However, there will be a general election in 2015 which may result in a change of government. It will be for the Secretary of State to bring into force the relevant part of the Act. Also, while the UK Government has stated their intention to set the cap at £72,000, this figure is not actually contained in the Act – the cap will be set and implemented by the Secretary of State.
  2. Care costs are calculated at the standard rate local authorities pay for a bed in a care home. The amount that people are charged by the home is often higher than this and “top-up” payments are regularly made.
  3. Care costs will only start to count towards the cap once the individual’s needs are deemed to be eligible according to new criteria. The legislation introduces national eligibility criteria, which will set the minimum needs which local authorities must meet – this is due to be implemented in April 2015.

Much of the debate has focused on the level of the cap, but a report published by the Kings Fund argues that the critical issue is the level at which the eligibility threshold is set.

The UK Government has published draft eligibility criteria regulations, and is currently consulting on draft regulations and guidance.


The Welsh Government is yet to decide its approach to reforming the system.

In March, the Deputy Minister for Social Services, Gwenda Thomas AM, announced she had commissioned an independent research study on the future of paying for care, due for completion in September. A first stage report has just been released, along with an update statement from the Deputy Minister. The report provides a baseline picture of the current situation and the second stage will appraise options for reform.

In regards to eligibility criteria for care; the Welsh Government established a technical group to develop recommendations for determining eligible needs. The Deputy Minister released a statement on this and has published the eligibility report from the group’s work, and invited comments over the summer.

In a further statement the Deputy Minister said that eligibility criteria regulations will be available for consultation in November this year; and paying for care regulations will be available for consultation from May 2015.

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