The care debacle

By Paul Lewis , Tuesday 25 September 2012

Royal Commissions, White Papers, the Dilnot report...are we any nearer solving the problem of who pays when we’re old and in need of care? Probably not, says Paul Lewis.
Bank notesCare funding: some clarity is needed

The Government responded in July 2012 to a major report on paying for care by older people. It promised that the means test to get free care would be improved; regional variations in the cost of getting care in your own home would be reduced; and a loan system would be introduced for people who did not want to pay for their care by selling their home in their lifetime.

Oh no. Hang on a minute. That was the response of the last Labour Government in July 2000 to the 1999 report of the Royal Commission on Long Term Care. Then, this year, the Coalition Government made almost identical commitments for care in England when it responded to the major report Fairer Care Funding by Andrew Dilnot, which had been published in July 2011.

The cap and means test
Anyone going into a care home is assessed both for care needs and financial resources. In England, if they have more than £23,250 in capital, then no help with the cost of care is given – they have to pay for it themselves. If their capital remains above that level, then they have to pay the whole cost of their care for the whole of their life in the residential home. With care home fees often £30,000 a year or more, that can amount to a very large sum.

Last year Andrew Dilnot’s report recommended that the lifetime amount any individual pays towards their care should be capped at somewhere between £25,000 and £50,000 – with a ‘fair’ midpoint of £35,000. Once they had paid that much, then the state would step in to pay the remainder, regardless of their own resources. In fact the recommendation was not quite that simple. First it was a cap only on the cost of care itself and excluded the price of board and lodging, which it suggested could be up to £10,000 a year. Second, it was not a cap measured in money.

As I explained last year in Saga Magazine, £35,000 is not the amount the individual has spent, but the value of the care they have bought at standard local authority rates. So if care in a residential home was available to local authorities at £350 a week, then £35,000 would buy 100 weeks of care. If someone is paying for their own care and it costs £500 a week, they will have spent £35,000 after 70 weeks. But they will reach the cap only after they have paid for 100 weeks of care. So they will have to pay out £50,000 before they can demand that the state takes over.

The Government has said it ‘supports’ the proposals for ‘capped costs’. But it wants to do it more cheaply – ‘We will look at how reform consistent with the principles of the Commission’s model can be implemented, but at a lower cost to the public purse.’ Dilnot suggested that his proposals would cost less than £2 billion a year.

Government calculations in the White Paper price Dilnot at around £2.4 billion in 2017/18. But they also show that if the cap were £75,000 or even £100,000, that cost would fall to just £0.7 billion.

A cap of £75,000 would not be reached until the resident had paid for about four years of care. That is longer than most people spend in a home at the end of their life. So most would not benefit. And the White Paper makes clear that those who did would be the better off. The Government does not say what the cap will be or when it might begin.

The loan
The White Paper proposes what is called a Universal Deferred Payment Scheme so that ‘No one will have to sell their home in their own (or spouse’s) lifetime to pay for residential care’. In fact, as I have made clear in Saga Magazine several times, no one has to sell their home to pay for their care under the present rules. If someone has an empty home, the local authority can pay for the care and then recoup it from the estate after the person in care dies. This scheme was introduced in October 2001 after the 1999 Royal Commission.

The Government called the use of this scheme ‘patchy’ and said that currently only 8,500 people have deferred their fees. Some councils try to avoid offering these schemes, largely because they do not have enough money. But a Department of Health circular issued in 2009 said that local authorities that did not offer this scheme would be acting unlawfully. Lawyers tell me that if a care home resident asks for a deferred payment scheme – and insists – they always get it.

The key difference between the existing scheme and the one the Government now promises to introduce in April 2015 is that under the existing scheme, no interest is charged while the bill clocks up until 56 days after death. But under the new scheme, interest would be charged from the start. That could mean several thousand pounds added to the cost when the estate finally settles the bill. So it would cost the heirs more than the current scheme does.

The Government will also repeal a 1983 law that allows the person in care simply to refuse to pay for their care, leaving the local authority to pay and, again, recover the cost from the estate. That can be useful when a local council unlawfully refuses to offer a deferred payment scheme. The value of a home is always ignored if it is lived in by a spouse (including civil partners and partners) or a relative who is aged over 60 or disabled.

Care at home
The new White Paper did promise a few useful things. First, to ensure all local authorities use the same criteria to assess whether a person is entitled to care in their own home. This ‘national minimum eligibility scheme’ is due to begin in April 2015 and should make it easier for people to move from one authority to another without losing the care provision they are used to. The Government will spend £200 million a year on developing housing for older people that will help them avoid the need – and the cost to the state – of moving into a residential care home. More details on that are due out in October.

But generally the White Paper Caring for our Future: reforming care and support could be summarised thus: all that is new is vague and all that is clear is not new.

Further information
To read the new White Paper, go to and search for ‘care and support white paper’. For a progress report search ‘scfunding’ on the same website.

For details of the deferred payment scheme, go to and search for LAC (DH)(2009)3.

* Visit and click on ‘My Writing’ to find previous Saga Magazine articles "Will the NHS pay your nursing home fees?" (June 2012) and "Hold on to your home" (May 2010).

* Read Paul Lewis's money articles every month in Saga Magazine .


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  • Sue Weston

    Posted: Friday 11 October 2013

    This whole procedure is a nightmare,as my family are finding.Our 90+yr.old parents are now v.frail.Mum is in a nursing home(part funded & we pay approx £200 p.w'top up')Dad now plans to join her.She needs nursing care,he just needs care.We have been quoted a joint care fee of £900p.w,their savings each individually exceed £23K, but not by much.Their main asset is their home(value approx.£150K,)only Dad's name appears on the deeds so is the house 'his' or 'theirs'? So who/which benefits or loses?


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