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Janet Davies: Govt not telling the whole story on care reforms

Janet Davies MM blog

Jeremy Hunt appeared to possess genuine compassion and care, but was he using well-honed political gloss or does he actually believe the Government have come up with a magic formula to ease the plight of an ageing population?

The contents of this week’s announcement on funding long-term care were a surprise to no one, expert and timely leaks saw to that. the more than doubled in value care cap took centre stage, with the increased upper threshold and prolonged Inheritance Tax freeze waiting in the wings.

But ministers still are not really telling us the full picture.

A care cap of £75,000 sounds to the majority as just that, stating that you will not have to spend more than this on your care.

This is where the fundamental flaw lies; based on Jeremy Hunt’s words, consumers are being misled into thinking that once they have spent £75,000 on care costs, their Local Authority will step in and pick up the entire bill.

This is simply not the case, the cap only relates to carecosts, not accommodation, food and other ‘hotel-style’ services necessary to live in relative comfort and the plusher the care home the higher the non-care costs.

As such, the majority of self-funders now will continue to be self-funders even after their care cap has been exhausted.

The level of care has yet to be put into a monetary value, but it is likely to be subdivided into low, medium and high, so the lower the care need the longer it will take to spend the £75,000 cap.

The threshold changes are significant and should be applauded, they do at least recognise that the average house price in England is worth much more than £23,250. Which will be more than a comfort to many, especially those have striven to become first-generation home-owners and have only their house to leave as a legacy.

Explanation is still needed around the thresholds and how they will interact with the cap as, in reality, only people with assets below the lower threshold (proposed to be £17,000) will get full Local Authority contributions from the outset.

All things considered, it’s a step in the right direction. The continued sustainability needs to be watched and evaluated, but it is the closest we have come to having legislative clarity.

By announcing the start date of the shiny new regime, the Coalition has given older people hope and younger, healthy people the opportunity to plan for their own care destiny.

People over the age of 65 should embrace the luxury of time and invest in the services of a specialist care fees planning adviser who will work with them to create their “Care Destiny Report”, exploring what would happen if care is needed before the legislation changes, what other later life matters are of concern, and what could happen if and when the new proposals come into force.

Then in 2017, if care has not been needed, the report can be revisited and rewritten accordingly. An important facet of a person’s care destiny report is that it can be given to family members and/ or attorneys (at any time from establishment) so that the situation is clear when the need arises.

Jeremy Hunt clearly stated that insurance products will have a part to play, but when questioned further he was unable to suggest what and by whom. All we need are a few brave companies, willing to put heads above parapets. Scope now exists for structured savings plans and stepped insurance type policies, although lessons must be learned from the policies of the past.

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  1. People need to understand the “2 Cs” fiddle. With both hands make a C using each thumb and middle finger. Then place your right hand middle finger against your left hand thumb, this will make a sort of S shape. Then a care home will make a charge which can be represented by your left hand middle finger down to your right hand thumb (the tips of the S). Now Social Services will only pay a rate represented by your right thumb to your right middle finger the rest you will have to pay for your self and there may also be a further deduction to cover food and accommodation. The whole of the Gov policy is devoid of meaning and if you do have to spend a long time in a care home you will pay most of it yourself.

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