Boris Johnson’s decision to reduce his social care cost cap has been rejected by the architect of a planned major overhaul.
The Government yesterday slipped out small-print relating to its social care reforms which means that means-tested support from local authorities for the less well-off will no longer count towards the £86,000 cap.
They will need to use more money for their care in order to reach the lifetime limit.
Andrew Dilnot conducted a review of the sector ten years back.
According to Mr Dilnot, the changes will have no effect on the “less wealthy”, and the shifting will only benefit the “less well-off”.
The cap is expected to be in place by 2020, according to Mr.
Also, he said that the lower property prices will hurt pensioners in north England.
Johnson refuted Mr Dilnot’s critique and claimed that the new social insurance system would deliver a significant improvement in all aspects of the country.
Andrew Dilnot was the original creator of the social care cost cap. He said that he was disappointed by the Government’s attempt to reduce its proposal.
Boris Johnson rebutted Mr Dilnot’s critique and stated that the new system of social care will bring a “massive improvement” for all citizens.
It is thought the decision to make the cap less generous will likely save the Treasury £500million.
The ‘further details’ of the long-delayed shake-up of social care were published yesterday, more than two months after the PM announced that National Insurance would rise to pay for the £5.4billion reforms.
Many pensioners were hoping that by imposing a limit on the lifetime cost of care, they would be able to avoid the possibility of selling their home to help pay for care.
However, the policy paper showed that this is unlikely to be of benefit to those currently receiving free State support under a means check. This contribution won’t be considered in deciding when they reach the cap.
So a poor pensioner receiving state support would have to spend £86,000 of their own money on extra care before they were deemed to have hit the limit.
According to the government, this is necessary so that people don’t reach the cap at an artificially higher rate than they contribute.
It said a new ‘much more generous means test’ – which increases to £100,000 from £23,250 the amount elderly people can hold in assets before they have to pay for all their care themselves – ‘is the main means of helping people with lower levels of assets’.
Treasury Select Committee: Mr Dilnot stated that he wasn’t happy with how the Government was approaching the issue, as he pointed out the danger of “big changes” for less wealthy pensioners.
He stated that this was a change for people who are on long care trips for serious care needs. It does not mean the less-well-off will be able to take advantage of the cap.
‘The only change as a result of all of these reforms will be that instead of running your assets down to your last £14,250 you have run your assets down to your last £20,000.
‘The people who are most harshly affected by this change will be people with assets of exactly £106,000 – that is the £86,000 of the cap plus £20,000 that is protected by the means tested system.
‘But everybody with assets of less than £186,000 would do less well under what the Government is proposing than the proposals that we made.’
He added: ‘That’s a big change that was announced yesterday and I think it is disappointing. It finds savings exclusively from the less well-off group.’
Mr Dilnot said ‘people who are unaffected by this change are everybody with wealth of more than £186,000’ but for those people with assets of £106,000 or less ‘this is almost exactly the same as the current system’.
He concluded that the reforms would not make it easier for approximately 40% of those who are elderly and in need of care.
Mr Dilnot explained: ‘About 60 per cent of older people who end up needing social care have assets of less than £186,000 and probably about 30 or 40 per cent have assets of less than £106,000.
The Government yesterday slipped out small-print relating to its social care reforms which mean that means-tested support from local authorities for the less well-off will no longer count towards the £86,000 cap
‘And of course there is a geographical distribution of this, so on the whole this will tend to hit less well-off people, obviously, harder.
‘It will tend to hit people in regions of the country with lower house prices harder than it does those in regions with higher house prices.
‘So there is a sort of north/south axis to this that people living in northern and other less high house price areas are likely to be hit harder than this on average.’
Expect the unexpected change to be voted upon by MPs next Wednesday, and Mr Johnson will likely face a Tory backlash.
Mr Johnson rejected Mr Dilnot’s criticism, telling broadcasters: ‘No, this is a massive improvement for everybody in the whole country because what we are saying is for the first time in history we are stopping people having to pay unlimited quantities for their care if they suffer from dementia rather than cancer, the unfairness is that if they get Alzheimer’s rather than cancer, the unfairness is they can see all their savings eaten up.
‘So we are restricting the amount that you can possibly pay to a fixed limit when the State comes in and helps you and we come in and help you as soon as you have assets of £100,000 or less… that has never been done before.’