Care reforms – what do they mean for you and your family?
There have been many recent articles in the media about the care reforms announced last month. Despite this coverage, it’s a complex area and many people are still confused about what the changes might mean for them or their relatives.
The first point to note, is that the changes are not due to take effect until April 2016. Until then, the current rules continue, and anyone with assets over £23,250 in England is expected to fund all of their care costs. This amount can include the family home or other property.
From April 2016, you will only have to pay for care costs if you have assets worth more than £123,000. Even if you have assets worth more than this, there will be a cap of £72,000 on care fee costs. Once you’ve paid this amount for care, the state will step in and help you.
The proposed changes should help people of modest means to preserve more of their capital.
This all sounds very positive, but the catch is that the cap only covers care costs. If you are in residential care you will be expected to contribute towards your “hotel” costs, like food and accommodation, as you would if you were living in your own home. However the government has set a ceiling of £12,000 on how much you will pay each year.
If you are concerned about preserving your capital for your family, it’s never too early to start planning. Not just for care costs, but also for inheritance tax, especially as one of the ways the government plans to fund the proposed changes, will be to freeze the nil rate band for inheritance tax at £325,000.
For an initial consultation at no cost to explore your options please get in touch.
For further information about the reforms, see: