Social care changes in England to come into force in October 2023
9th Sep 2021
The changes announced by the Government this week have proposed that there will be a rise in National Insurance from April 2022 and a change in how social care is paid for from October 2023.
The changes are set to include:
- From October 2023, over their lifetime people will no longer pay more than £86,000 in care costs – that is, for actual care, rather than accommodation.
- Local authorities will step in once this cap has been reached.
- Those with between £20,000 and £100,000 in assets will get means-tested help towards costs from their local council
- Those who own less than £20,000 will not have to pay towards care costs from their assets at all, but might have to contribute from their income.
To pay for this, the announcement also included the news that from April next year, National Insurance payments will increase by 1.25%. From April 2023, this will show up as a new tax and appear as such on payslips and other documentation as The Health and Social Care Levy. Unlike current National Insurance rules, those who have passed retirement age but continue to work will be subject to this tax. Shareholders will also be subject to this rise and must pay an additional 1.25% on their profits.
Laura Rumsey, Head of Private Client Norwich said “there have previously been proposals for social care reform which have not materialised. We will keep these proposals under careful review and be able to assist our clients in planning for care when we have more firm information. We know that planning for care in the future is a big focus for many clients. There is often a misconception that people’s life savings will be used if they require care in the future. Whilst this may be true in some circumstances it is normally possible for us to discuss through the issues with our clients and give them the full information to make informed decisions. We often find that people are in a better position than they believe they will be or we can plan in advance for future care needs.”
If you have any questions on care planning now or in the future then please do feel free to contact our team of experts.
*This article is provided for general information purposes only and does not constitute legal or any other professional advice.