Government to announce care costs cap today

The Government is set to announce on Monday a major change in the way that older people will pay for their social care needs in future.

Once it comes into force in April 2017, the amount an individual has to pay for care over their lifetime will be capped at £75,000 and the means-test threshold for residential care will be raised to £123,000.

What does this actually mean?

This new announcement means that people entering a care home with less than £123,000 - including the value of their house - won't have to pay the full cost of their care. This is a substantial increase from the current threshold of £23,250.

People will, however, have to pay so called 'hotel' costs for their board and lodging, which will be limited to a maximum cost every year.

The cap on care costs means that all individual expenditure on care costs will be 'metered' and once the meter reaches £75,000, the state will pay care costs for the rest of an individual's life.

However only the care element of residential home costs will be eligible to count towards the lifetime cap - hotel costs will always be paid by the individual.

The reforms will come 18 months after the publication of the Dilnot report in July 2011 which suggested a cap of £35,000 on the amount an individual has to pay for care and hotel costs to be capped at a maximum of £10,000 annually.

Age UK response

Commenting on the story, Michelle Mitchell, Charity Director General of Age UK said: 'Social care for too long has been the Cinderella of political priorities, hidden away and ignored. If the media reports are correct, the Government will take a welcome step towards bringing older people fairer access to care support when they need it most.'

However, the reports of a higher cap than had been recommended by Dilnot is not positive news: 'Age UK has always supported the principle of a cap because this protects against limitless care costs and is fairer for those who have saved, but we are disappointed that that the level of the cap looks likely to be much higher than the amount recommended by Andrew Dilnot: a lower cap would benefit more people and make it easier to plan ahead.'

The increase in the means test level - from £23,250 to £123,000 is welcome news, though: 'More encouraging is the raising of the current miserly upper means test threshold to a fairer figure,' said Michelle Mitchell. 'Age UK believes it would be a compassionate gesture to introduce this immediately to help those currently seeing their last savings disappear into care costs.'