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New Rules for Care Fee Payments: What You Need to Know

Kylie Cox
A toucan wearing glasses holds cash and a calculator in front of a house with a "FOR SALE" sign. Text says "Care Fees Planning."

The cost of care in the UK is a significant concern for many individuals and families, especially as people live longer and require more extensive care. With constant changes to care fee policies, it’s essential to understand how these may impact you and your loved ones. This blog explores what the new rules for care fee payments were meant to be, why they were scrapped, and what the current rules are.


What Were the New Rules for Care Fee Payments - Proposed Changes?

In 2021, the government outlined their new rules for care payments in their ‘Build Back Better: Our Plan For Health and Social Care’ publication. These reforms included:


  1. Lifetime Cap on Personal Care Costs:

    • A proposed £86,000 cap on personal care costs, meaning individuals would not need to pay more than this over their lifetime for personal care. However, the cap excluded accommodation and daily living costs.

  2. Increased Means-Tested Support Thresholds:

    • The lower threshold for local authority-funded care was set to rise from £14,250 to £20,000.

    • The upper threshold for means-tested support would have increased from £23,250 to £100,000, allowing more people to qualify for financial assistance.


These reforms were initially set to come into effect in October 2023 but were delayed until October 2025. However, the new Labour government has now scrapped these changes entirely.


Why Were the New Rules Scrapped?

Chancellor Rachel Reeves announced that cancelling these adult social care reforms would save the UK £1.1 billion by the end of 2025/2026. The government has decided to focus on other priorities, leaving the previous care fee system intact. This decision has caused frustration among those hoping for more equitable support for care costs.


What Are the Current Rules for Care Payments?

With the proposed changes scrapped, the following rules remain in place:


  1. Means-Testing for Care Costs:

    • Individuals with assets below £14,250 receive full local authority funding for care.

    • Those with assets between £14,250 and £23,250 receive partial funding, with contributions based on income and savings.

    • Individuals with assets over £23,250 must pay for their own care in full.

  2. No Cap on Lifetime Care Costs:

    • Unlike the proposed system, there is no limit to the amount an individual might have to pay for care during their lifetime.

  3. Local Authority Rates:

    • Care costs are assessed based on local authority rates, which may be lower than private care rates. If an individual opts for more expensive private care, they must cover the difference.

  4. Accommodation Costs:

    • Accommodation and daily living costs are not covered by local authority funding and must be paid separately, even for those receiving means-tested support.


Planning Ahead to Protect Your Assets

With the current care fee rules remaining unchanged, proactive planning is more important than ever. Steps you can take include:


  • Writing a Will: Ensure your assets are distributed according to your wishes and explore whether a trust could be beneficial.

  • Setting Up a Lasting Power of Attorney (LPA): An LPA allows trusted individuals to make financial and care decisions on your behalf if you’re unable to do so.

  • Exploring Trusts: Property protection trusts can safeguard a share of your home, ensuring it is passed on to loved ones while allowing the surviving partner to live there.

  • Seeking Professional Advice: Navigating care fee rules and estate planning can be complex, and professional advice ensures you’re making informed decisions.


How Toucan Law Can Help

At Toucan Law, we specialise in estate planning and asset protection. Our experienced team can help you:


  • Understand the implications of the current care fee rules.

  • Explore whether a trust is suitable for your circumstances.

  • Draft Wills and set up Lasting Powers of Attorney to safeguard your future.


We provide compassionate and professional advice tailored to your unique needs, offering in-person, online, and telephone consultation


Take Action Today

Don’t let care fee concerns overwhelm you. With the proposed reforms now scrapped, it’s vital to plan for the future using the existing rules. By taking proactive steps, you can protect your assets and ensure your loved ones are cared for. Contact Toucan Law today for expert guidance on care fee planning and estate management.


You might also be interested in reading our other blog posts:


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