The Government is expected to set the cap on long-term care costs at £75,000, more than double the £35,000 cap recommended by a commission led by economist Andrew Dilnot.
The Sunday Times reports chancellor George Osborne has agreed to stump up £700m for a £75,000 cap in a deal between the Department of Health and the Treaury.
The Government’s approach to long-term care reform will be set out as part of the coalition’s mid-term review, which will be published later today.
The Dilnot Commission, which published its report into the future of long-term care in July 2011, called called for a cap on individuals’ lifetime contributions to social care costs of between £25,000 and £50,000, with £35,000 the recommended figure. Under Dilnot’s proposals, when that cap is reached, people would be eligible for full state support.
Currently the means-tested threshold where people are required to fund the full costs of their care is £23,250. The Dilnot commission recommends increasing this to £100,000.
Osborne is thought to have dismissed the introduction of a lower cap on care costs as that would push the cost to the Government up to £1.7bn.
As with the Dilnot proposals, the £75,000 cap would not cover so-called “hotel costs” of accommodation or food, and is expected to be introduced in 2015/16, according to the report.
Last week former care services minister Paul Burstow suggested a means test on winter fuel payments and the scrapping of capital gains tax relief on death to help fund a cap of £60,000.
Dilnot told Money Marketing last January that an increase to the cap on long-term care costs much above the £50,000 level could render the reforms ineffectual, after it emerged the Department of Health was considering setting the cap at between £50,000 and £60,000.
He said at the time: “Going significantly beyond £50,000 in 2011 prices would begin to make the cap significantly less effective and it would stop having the effects we saw as most important like risk pooling.”
The mid-term review is also expected to outline plans for providing working mothers with support for child care costs to help them return to work, following the furore over changes to child benefit for higher earners.
Proposals for a single state pension as well as measures to help first-time buyers are also set to be announced later today.