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The Actuary The magazine of the Institute & Faculty of Actuaries

Dilnot commission reports on future of long term care

The Commission on Funding of Care and Support today presented its findings to the government in its report Fairer Care Funding.

It suggests individuals’ contribution to their long term care (LTC) costs should be capped at about £35,000, after which they will be eligible for full State support.

It also suggests the means-tested threshold, above which people are liable for their full care costs, should be increased from £23,250 to £100,000.

The current adult social care funding system, conceived in 1948, means that those with assets of more than £23,250 are liable for the full cost of their social care needs.

Economist Andrew Dilnot was asked by the Coalition last year to look into how the system of funding social care in England could be changed amid concerns it was getting harder for people to get access to state support.

Key recommendations

>> Individuals’ lifetime contributions towards their social care costs - which are currently potentially unlimited - should be capped. After the cap is reached, individuals would be eligible for full state support. This cap should be between £25,000 and £50,000. We consider that £35,000 is the most appropriate and fair figure;

>> The means-tested threshold, above which people are liable for their full care costs, should be increased from £23,250 to £100,000;

>> National eligibility criteria and portable assessments should be introduced to ensure greater consistency; and

>> All those who enter adulthood with a care and support need should be eligible for free state support immediately rather than being subjected to a means test.

>> People should contribute a standard amount to cover their general living costs, like food and accommodation, in residential care;

>> Universal disability benefits should continue, but Attendance Allowance should be rebranded so people understand its purpose;

>> An awareness campaign should be launched to help people understand the system and engage with it;

>> Carers should be supported by improved assessments which aim to ensure that the impact on the carer is manageable and sustainable; and

>> The deferred payment offer should be extended so it is available to everyone, wherever they live.

The Commission estimates its proposals - based on a cap of £35,000 - would cost the State around £1.7bn.

In the next 20 years, the number of people aged 85 and over in England is projected to double to 2.4 million.

A quarter of 65-year-olds today can expect to face care costs of over £50,000 and for one in ten it will be more than £100,000.

Andrew Dilnot, chair of the Commission, said: "The current system is confusing, unfair and unsustainable. People can’t protect themselves against the risk of very high care costs and risk losing all their assets, including their house.

"This problem will only get worse if left as it is, with the most vulnerable in our society being the ones to suffer.

"Under our proposed system, everybody who gets free support from the State now will continue to do so and everybody else would be better off.

"Putting a limit on the maximum lifetime costs people may face will allow them to plan ahead for how they wish to meet these costs. By protecting a larger amount of people’s assets, they need no longer fear losing everything."

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