The Commission on Funding of Care and Support published its Fairer Care Funding report on July 4, 2011. Headed up by Andrew Dilnot, this independent body was tasked with investigating how to set up an adult social care funding system that was both fair and sustainable by the UK government last July. What did the report find and how likely it is that its recommendations will be accepted?
Why Doesn't the Current Social Care System Work?
At the moment, older people who need social care – either in their own homes or in care homes – may have to fund all or some of their costs depending on their assets. So, you will not qualify for council-funded provision if your assets exceed £23,250. Those who have less than £14,250 will qualify for long-term care funding; those who fall between these two levels will get some help depending on where they sit on the scale. This currently leaves many older people having to pay their own costs or go without vital services.
Those who do pay could potentially end up depleting their assets until they reach the lower limits when the state will pick up funding. The system is further complicated by our ageing population, the freedom given to individual councils to set their own standards and the fact that few people actively plan for these costs. According to a report in The Guardian ("Elderly care proposals: all you need to know about the Dilnot report", Jill Insley, July 4, 2011), AgeUK figures show that 800,000 elderly people need help at the moment, but don't get it. This is set to rise to 1 million by 2014.
Dilnot Commission Recommends Caps, Means-Testing Thresholds and National Eligibility
In order to make the system fairer, this report sets out a number of recommended changes. The first would set a cap on contributions at a level of £35,000. Once an individual has paid that sum towards his or her costs, the state would then take over. The Commission also found that the current system of means-testing should be increased to £100,000 from £23,250. This should also be set at a national level to reduce current local inconsistencies.
These recommendations would make it easier for people to know, in advance, what their costs might be and may improve attitudes towards saving for long-term/later life care provision. According to Andrew Dilnot (" Commission Report Published ", The Commission on Funding for Care and Support, July 4, 2011): "Putting a limit on the maximum lifetime costs people may face will allow them to plan ahead for how they wish to meet these costs. By protecting a larger amount of people’s assets they need no longer fear losing everything.”
Will the Government Implement the Findings of the Fairer Care Funding Report?
Although this report was commissioned by the government, it is not yet clear whether any or all of the recommendations made will be adopted. The Commission is hoping that the process can move to White Paper stage by Easter 2012. Funding is likely to be one of the main issues as full implementation would come at an estimated cost of £1.7billion.
According to the report, public funding could come from reprioritising the spend of existing income or by the use of additional taxation. This could be funded in the current way with general taxes or by a specific levy (which could affect pensioners as well as workers). At this stage, it is impossible to know when, if or how recommended changes could impact on the future of the social care system, even though modifications would benefit the population as a whole.
Carol Finch - Carol Finch is the Topic Editor for Retirement Planning, Budgeting, E-Commerce & Technical/Business Writing on Suite101.
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