In September, the government announced plans to overhaul social care funding in England. These changes will impact how much we pay in taxes and how much support the elderly will receive from the government. Here we will look at what is changing and what to expect.
Paying for Care
As part of the government’s proposals, as of October 2023 people will no longer have to pay more than £86,000 in care costs over their lifetime. They will still be expected to pay in full for their accommodation. Beyond the £86,000 cap, local authorities will cover the cost of personal care.
This support will be means-tested. Those with assets of less than £20,000 will not be required to pay anything towards their care from their assets. People with assets under £100,000 will be eligible for support from local councils, though might have to contribute from their own income.
Where Will the Money Come From?
Announcing these incoming changes to social care funding, the Prime Minister stated that the money would come from an increase in National Insurance. As of April 2022, payments will increase by 1.25%, and are expected to raise £12 billion a year.
Starting in April 2023, this additional payment will become a separate tax based on earned income. It will be called the “Health and Social Care Levy”. It is a payment that will also be paid by individuals who continue to work after retirement age.
Government estimates say the changes will result in costs of £255 a year for someone earning £30,000, and £505 a year for someone on £50,000. It was also revealed that shareholders will be required to pay an extra 1.25% tax on their profits.
Who Will Benefit?
According to the government’s proposal, these changes will apply only to individuals who start receiving care after October 2023. Whilst this will certainly make care services more affordable for many families, it does mean that those already struggling will miss out on this support. People currently in the process of applying for care will also not be included in these social care funding changes.
However, the increased taxation will also be used to ease the NHS backlog.
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