The Conservatives' Adult Social Care Reform Proposals, 'The Dementia Tax' - A Rolling Update

Adult social care in the UK has long been a thorny and controversial issue. The population is ageing and there is pressure on the Government to balance the higher costs of adult social care against its other healthcare obligations.

Adult social care has made the headlines again recently as the Conservative Party have made it a key point of their General Election manifesto. In 2011 the Alzheimer's Society said:

"People with dementia face the highest costs of care of any group and have to pay the most towards their care. This is why charging for care is described as 'The Dementia Tax.'"

Adult social care is devolved for Scotland, Wales and Northern Ireland, so the Conservative party's adult social care proposals apply only to England.

The party's manifesto put forward three key proposals for England:

  • Currently councils pay for all or part of a person's social care if they have less than £23,250 in capital. The manifesto proposed raising this limit to £100,000.
  • Currently, the value of a person's home is only counted in this limit if they are in residential care or nursing homes. The manifesto proposes including the value of someone's house, even if they remain living in it but require care at home.
  • Currently, people in residential care or nursing homes can defer payment for their residential care until after their death if they choose to, when the outstanding care fees can be recovered from their estate. The Conservative manifesto proposed extending this deferment to people who receive care at home too.

The manifesto argues these measures will put residential care and home care means-testing on an equal basis whilst ensuring that those assets an individual can keep will not fall below £100,000.

Overall people in residential care will benefit from the proposed changes, while people who need care at home will either find their situation unchanged or lose some level of eligibility for care, according to an analysis by the Institute for Fiscal Studies (IFS).

The IFS calculate that 12-17% of those in their 70s who currently receive support would no longer be eligible under the proposed new rules. The value of these people's homes would now be included in their financial assessment under the new rules, bringing their total assets in excess of the £100,000 limit, and therefore making them laible to pay for their care.

Changes to the way that adult social care is funded has caused anxiety for some of the most vulnerable members of our communities. However it is important to understand that these changes are currently only proposals. This was highlighted in the post-election Queen's Speech, which removed all mention of how adult social care reforms would function. The two-year Government programme set out in the speech promised reform, but stopped short of making specific pledges on the details. It said full plans would be published and consulted on at a later date.

Age UK charity director Caroline Abrahams believes a fairer system is "so desperately needed". She added: "The proposals set out in the Conservative Party manifesto were insufficiently thought through and involved a major shift of financial liability onto older people and their families".

Our Wills, Trusts and Probate team are on hand to help with any concerns and requirements you have around estate planning and social care funding. We will update this article when the government announces any further information about adult social care reforms so that you can understand how the proposed changes may affect your own estate.

For information and assistance about Wills and Estate Planning in the meantime please contact any of our lawyers on 01603 620508, email us on or complete the enquiry form on our website.