View more on these topics

Tony Mudd: LTC reforms a step in the right direction

Tony Mudd MM blog

I think it would be churlish not to welcome the Health Secretary’s recent announcement of the changes to Social Care Funding. They do, after all, recognise that the current system is both unfair, and unsustainable. Even if there is dispute as to whether they are ideologically sound, they have at least made clear the Government’s intentions, something far too many previous administrations had failed to do.

The changes themselves will see a raised means test threshold and the implementation of a cap. While this is in line with the Dilnot proposals; and the threshold is as recommended, the cap, at £75,000, is considerably higher. Ultimately, however, the problems are similar to those arising out of the original Dilnot proposals:

  • Even though the threshold for the upper means test limit will be raised significantly, the lower means test limit will not. With tariff income calculated at £1 per week for every £250 over the lower means test limit, significant further personal contributions may be required prior to the application of the cap,

  • There is no definition of what needs are “eligible”. Therefore, if an individual’s needs do not meet these, as yet undefined, criteria the cap will not apply,

  • The cap accumulates at the value of the local authority assessed need, and not on how much the individual either wants or may spend on their care, and

  • The cap also excludes general living or hotel costs, which will be set at a rate of £12,000 a year.

These changes will only apply from April 2017, with anything spent on care before this not counting towards the cap.

Despite this, it is a step in the right direction, and an important step in reforming adult social care. What is absolutely necessary, however, to meet the minister’s objective of providing “certainty and peace of mind” is the availability of good specialist financial advice. Advice that will guide individuals through what will now be a more complex social care system, advice that will enable people to make the best care choices and advice that just might make the difference between these reforms failing and being the break through that this market needs.

Tony Müdd is divisional director of development & technical consultancy at St James’s Place


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm