Last week, the Conservative Party leader set out plans in the run up to the general election on 8 June to significantly raise the threshold of personal assets at which people will be eligible for state help with residential care costs from £23,250 to £100,000 (€116,424, $129,396).
The “floor” means people with more than £100,000 in assets will have to pay for their own elderly care out of the value of their homes, rather than relying on the council to cover the costs of visits by care workers.
Dementia tax
Taxpayers can defer payment as the state will deduct the cost from their estate when they die, which commentators have likened to a ‘dementia tax’ because sufferers of the disease living at home will have to pay while people with cancer in hospital would not.
Currently, anyone with assets of over £23,250 is expected to pay the full cost of their care, which doesn’t include the value of their homes.
Absolute limit
However, speaking at a campaign event on Monday, May watered the down the key election pledge, saying she will set an “absolute limit” on the amount over £100,000 that pensioners will have to pay for their care.
“I want to make a further point clear. This manifesto says that we will come forward with a consultation paper, a government green paper and that consultation will include an absolute limit on the amount people have to pay for their care costs.
“So let me reiterate: We are proposing the right funding model for social care. We will make sure nobody has to sell their family home to pay for care. We will make sure there is an absolute limit on what people need to pay. You will never have to go below £100,000 of your savings so you will always have something to pass on to your family,” she said.
Dilnot cap
In July 2015, her predecessor David Cameron delayed plans to implement a £72,000 cap on long-term care, known as the ‘Dilnot Cap’, which had been due to come into force by 2020.
‘Pressing crisis’
Steven Cameron, pensions director at Aegon, said the “pressing crisis” in social care funding can only be solved through a “clear, fair and long lasting agreement” on what the state provides and what individuals will be expected to pay.
“The original Conservative proposals left many facing an unlimited bill, with no state support until assets fell below £100,000, and no means for individuals to plan ahead to cover possible care costs while keeping inheritance aspirations intact.
continued on the next page
