National Insurance hike fury as ‘misleading’ social care cap doesn’t cover food or housing

GMB: Susanna Reid says Boris has 'no plan' on social care

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Speaking on Tuesday, Prime Minister Boris Johnson announced a new system of funding social care which will come into effect from October 2023. The long-promised and controversial reforms see a cap of £86,000 on lifetime care spending and a “floor” on assets which stops anyone who needs care from spending all their savings.

However it has emerged the £86,000 cap on lifetime care spending only applies to “personal care”, meaning the physical acts of caring regulated by the Care Quality Commission.

Therefore, the cap will not cover “hotel costs” for residents of care homes, which includes accommodation, cleaning and food.

Care providers have flagged “hotel costs” often exceed “personal care” costs.

Experts are now branding Mr Johnson’s cap on care spending “misleading”, and are warning it will not avoid a “catastrophic loss of assets”.

Speaking to The Telegraph, Jane Brightman, the director of social care at the Institute of Health and Social Care Management, flagged the high price of “hotel costs” for care home residents.

She told the outlet: “Hotel costs are very expensive – it covers food, bedrooms, etc – and you’re still going to have to sell your home to pay for these things.

“Where are you going to find that money from? It’s very difficult.

“It’s a bit misleading in the way this has been outlined via the announcement in the plan for health and social care.

“We need urgent clarification on this.”

Sir Steve Webb, pensions minister under Prime Minister David Cameron, added “I reckon virtually no one this decade” will benefit from the cap on care spending.

He posted on Twitter: “[It] will take years to set up individual accounts, do individual needs assessments etc, and then build up £80,000 cost in (non hotel) costs.

“A £100,000 asset floor by contrast could benefit people as soon as it came in.”

Stephen Lowe, group communications director at retirement specialist Just Group, also told The Telegraph: “It could easily take, perhaps, three or four years and £200,000 to £400,000 of associated spending to reach the cap.

“So financial planning to avoid catastrophic loss of assets will continue to be a valuable service provided by financial advisers.”

Back in July 2010, economist Sir Andrew Dilnot recommended a cap on lifetime contributions of an individual at an amount between £25,000–50,000, and considered the figure of £35,000 to be a fair amount after being commissioned by the Government to research the issue.

Health Secretary Sajid Javid was unable during Tuesday’s Downing Street press conference to repeat Mr Johnson’s election guarantee nobody will have to sell their homes to cover social care costs.

He said: “People for the first time will now have complete confidence about the maximum they’ll have to pay.”

He said the £86,000 cap would allow people to “plan much better for their future – manage their assets better”.

During the conference, Mr Johnson insisted the plan was “right, reasonable and fair”, and stressed it shares “the risk of these catastrophic care costs, so everyone is relieved of that fear of financial ruin”.

It comes as Mr Johnson has been criticised for hiking National Insurance to pay for the reforms, with employees and the self-employed paying 1.25 percent more from April 2022.

From April 2023 National Insurance will return to its current rate of 12 percent on earning between £9,564 and £50,268.

A new ‘Health and Social Care Levy’ will be introduced at a rate of 1.25 percent from April 2023.

The Prime Minister said it will raise £12 billion a year which will be used to tackle the health backlog caused by the Covid pandemic and boost social care.

UK Home Care Association chief executive Dr Jane Townson said it was “nowhere near enough” and some measures could “create new risks”.

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