Social Care Reforms

After seemingly endless debate and discussion, this week sees social care as one of the flagship issues to be included in the Queen’s speech for the coalition government’s plans for the next session of parliament. The admirable aim of the reforms is to put the social care sector alongside the NHS at the heart of the welfare state for the first time, something overlooked when the NHS was set up in 1948.

The reforms are desperately needed to cope with an ageing population, relieve pressure on hospitals, and minimise the impact of a 20% cut over three years in English councils’ social care budgets, according to the Association of Directors of Adult Social Services.

The social care reforms build on proposals recommended by the Dilnot commission. In addition to a comprehensive overhaul of the existing legislation, which should help to define the boundaries between free NHS care and means-tested top-ups, there are two eye-catching measures to be introduced from 2016. The first is a new lifetime cap on care fees, which means that the State will intervene and pay the full costs of domiciliary or residential care once an individual has paid £72,000. Secondly, the residential care means-test threshold will be increased from the current £23,250 to £118,000. Whilst social care in England will remain partly privately funded, unlike in Scotland, the changes should help 100,000 more people according to the Chancellor, as an estimated 16% of older people face costs of £75,000 or more. The reforms should also make it easier for people to plan for later life, leave savings to children, and reduce the number of people forced to sell their homes to pay for the cost of their long-term social care.

State Pension reforms will also feature in the Queen’s speech, as the State Pension changes to a flat-rate for anyone reaching retirement age from April 2016. The new State Pension will require that you have made National Insurance contributions for at least 35 years to qualify for the maximum £144 per week, an increase from the current maximum of £110.15 per week. However, as always the devil is in the detail – the new pension will be based only on individual NI contributions, so married partners retiring after 2016 who could currently claim a higher State Pension based on their own spouse’s NI record will in future receive a lower pension.

Whilst I welcome the higher priority the government is giving to both social care and pensions, the changes inevitably result in a need for specialist advice in later life. The Society of Later Life Advisers (SOLLA) accredits advisers who are committed to delivering high quality advice to older clients and their families underpinned with a strict code of professional ethics, covering care fees, pensions, equity release, inheritance and investments.

[Matthew Clark, Western Morning News, 9 May 2013]

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