12 th November 2012 Clare Hensman, Department of Health, Funding Reform Care and Support Reform

2 The reform timeframe Social Care Vision _______ Nov 2010 Law Commission Report __________ May 2011 Dilnot Commission Report ___________ July 2011 Caring for our future - engagement _________ Sept - Dec 2011 Care and Support White Paper Progress report on funding Draft Care and Support Bill __________ July 2012 Engagement and pre- legislative scrutiny on draft Bill Legislation Working with partners on funding reform Spending Review

3 We will change care and support in two fundamental ways: The Care and Support White Paper – our vision 1. The focus of care and support will be to promote people’s independence, connections and wellbeing by enabling them to prevent and postpone the need for care and support. 2. We will transform people’s experience of care and support, putting them in control and ensuring that services respond to what they want.

4 The Government has agreed the principles for funding reform Agrees that the principles of the Dilnot Commission recommendations – financial protection through capped costs and an extended means-test Intends to base a new funding model on the recommendations if a way to pay can be found Final view to be taken at the next Spending Review Engage with stakeholders on design issues in the interim Commitment to introduce Universal Deferred Payments from April 2015 – a loan to cover the costs of residential care.

5 The Dilnot Commission identified that people face the prospect of very high care costs with no easy way to protect themselves Expected lifetime costs for people currently aged 65 (2009/10 prices) Source: Dilnot Commission 1 in 4 will have costs exceeding £50k over their lifetime 1 in 10 will have costs exceeding £100k over their lifetime 1 in 4 will have no social care costs

6 The problem most affects people with modest wealth Indicative proportion of assets depleted under the current system for someone with very high residential care costs, by initial level of assets on going into care Source: Dilnot Commission People can end up using over 80% of their assets paying for care Worst affected are people in the middle of the wealth distribution

7 The capped cost model would give people certainty over the amount they would have to pay Expected lifetime costs for people going into care in 2010/11, by percentile Lifetime care costs capped at between £25,000 and £50,000

8 A higher cap could provide a more affordable way to implement the reforms There are a range of possible costs, depending on the level of the cap and people’s contribution towards their general living costs. The higher the cap, the lower the cost to Government. Costs include the cap, extended means test, contribution to living costs, reform for working age adults and administration costs for LAs The cost of the reform for different variants of the Commission’s proposals (2012/13 prices) Source: Dilnot Commission £50k cap, £10k living cost £75k cap, £10k living cost £100k cap, £10k living cost £35k cap, £10k living cost

9 Dilnot recommended amending the capped cost system for working age adults Free Care 18 to 39 £10k Cap 40 to 49 £20k Cap 50 to 59 £30k Cap 60 to 64 £35k Cap 65+ Working age adults can also have high care costs. They have less ability to plan for their care costs. Dilnot recommended that: People who turn 18 with eligible social care needs should be entitled to free care; People who develop care needs between 18 and 64 should face a lower cap. Precise details of the design were left to be determined by Government What factors should be considered when determining the cap that people face?

10 The capped cost model would cover reasonable care costs People in residential care pay a contribution towards their living costs, if they are able to. This is between £7,000 and £10,000. Care costs up to the local authority rate are counted towards the cap. In addition to this, some people will get means-tested support. Once people reach the cap, the state pays their care costs up to the local authority rate. People who spend more than the local authority rate will have to top up before and after the cap. £ Time

11 The amount people pay up to the cap will depend on their wealth Indicative lifetime spending Initial wealth Current System £35k cap £200,000£150,000£35,000 £150,000£129,000£35,000 £100,000£82,000£28,000 £70,000£53,000£18,000 £50,000£34,000£12,000 £40,000£24,000£9,000 £14,250 or less£0 The care costs counted towards the cap is the cost of the care package, not what a person pays towards it. If they receive financial support from the LA, they will not have to contribute the full amount towards the cap.

12 We continue work with stakeholders through issues raised in the progress report, to support a decision on Dilnot The Progress Report raised a number of issues that we are exploring to support a decision on Dilnot. There are questions relating to practicalities and implications of the cap. –What would we expect to change as a result of the cap for people? –What would need to be in place to ensure the cap works? Also, we are identifying the right reforms for working age adults to ensure that we see the right outcomes for individuals and the social care system. –What does free care/the tiered cap achieve? –What factors should be considered when determining the cap that people face?

13 Finally Read and sign-up to our bi-monthly Social Care Bulletin at Check our frequent updates on the Caring for our future website at Follow us on Twitter at: For regular updates and new information on the work we are doing to reform and improve care and support: