* the overall "cap" on costs being confirmed at £75,000, much higher
than the £35,000 recommended by Mr Dilnot's review. However, sources said
the £75,000 figure was at 2017 prices and on current rates was around
£61,000.
* pensioners still having to meet accommodation costs – the "bed and
board" charge for care home stays. These will be limited to £12,500 per
person per year;
The new move will cost the Treasury £1billion a year by 2020. It is understood
this will be met from savings elsewhere, including recent pension changes
and the decision to extend the freeze on the threshold for paying
Inheritance Tax at £325,000 for individuals or £650,000 for couples for
three years from 2015-16.
Nick Clegg, the Deputy Prime Minister, writes in the Sunday Telegraph: "We
will make sure no-one is forced to sell their home to pay for care in their
lifetime, and no-one sees their life savings disappear just because they
developed the wrong kind of illness."
The crucial detail in the announcement will be the increase in the savings
limit on help. Currently set at £23,250, this will be raised to £123,000. At
this point, the Government will start paying some of the costs on a sliding
scale depending on the pensioner's level of income – but only £14,000 of
savings are expected to be fully protected.
Ministers will claim that the new social care funding system will offer
"unprecedented" financial support for elderly people and that it is being
set at the right level given the continuing pressures on the public
finances.
The £75,000 cap will apply to every pensions. If both husband and wife end up
moving into residential care, it could mean they will have to pay up to
£150,000 before the state steps in.
Based on an average care home stay of two years, this means a couple could
still spend £200,000 on fees for a basic care home.
Under the new system, once a care home resident has spent £75,000 on fees, the
state will step in and pay the basic rate for any more care required.
Before that point, it will also protect some assets and savings.
When a pensioner's assets are drained down to £123,000, the state will meet
some of the costs of care. Just the last £14,000 of savings are expected to
be fully protected, as in the current system.
Once the state steps in, it will only pay for basic care, which will not
necessarily meet the standards that the resident was previously paying for.
If pensioners are paying bills for care homes which are higher than the rates
that councils will pay, they could be forced to move to cheaper institutions
or to seek family help to pay "top-up" fees.
Ministers will also claim nobody will be forced to sell their home in their
lifetime – with everyone given the right to defer paying until after their
death.
A Treasury source said: "We came into power to help those who work hard and
want to get on. This does that as it means those who have worked and saved
all their life and bought a property won't have it taken away just because
they did the right thing. That's only fair."
Mr Clegg writes: "This reform will help protect some of the least wealthy
pensioners from care costs – a fact lost on those who have sometimes argued
that Dilnot's proposals are just about helping people in big, expensive
houses.
"Of course, all these changes come with a price tag. At a time of financial
austerity, we have to think carefully about spending more money. But for me
it's clear cut: with an ageing population we can't duck this issue again.
"There have been too many reports and commissions started by governments over
the last 20 years that have ended up gathering dust in a drawer.
"Over the coming decades, more and more people will suffer from long term
conditions in their old age. It's time to wake up to reality and sort out
care funding once and for all."
Tomorrow's announcement will be hailed as a major plank of the coalition's
"mid-term review" – a series of policy announcements for the second half of
the current parliament, which will also include banking reform and childcare
changes.
The bulk of the overall cost will be met from savings obtained through
recently announced changes to the pensions systems – which will see both
private and public-sector employees having to pay more in National Insurance
Contributions from 2017.
Mr Clegg writes: "Anyone who says the coalition will be derailed by the
upcoming by election in Eastleigh, where Liberal Democrats and Conservatives
will be campaigning against each other to win the seat, should look closely
at the announcements we make.
"We will demonstrate that, despite our political differences, the two parties
in this coalition can work together to make real progress in tackling the
problems Britain faces, making big decisions together about the future of
our country."
However, the build-up to Monday’s announcement has seen a serious amount of
Whitehall wrangling involving Mr Clegg and the Cabinet Office, the Treasury,
and the Department of Health – which has a Conservative secretary of state,
Jeremy Hunt, and a Lib Dem care minister, Norman Lamb.
There has also been criticism of the government's plans from inside Mr
Dilnot's commission. Lord Warner, one of its members, said an overall cap of
£75,000 would still mean pensioners typically losing half the value of their
homes before receiving any state help.
Source:
http://www.ezonearticle.com/2013/02/09/savings-boost-for-pensioners-in-care-shake-up/
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