Boris Johnson is facing a furious Tory revolt over a “sneaked-out con” that will cost poorer and northern people more in care home fees.
The Prime Minister has inserted a crucial piece of small print into his cap on care costs that will affect those with less than £186,000 in assets.
Tory MP Christian Wakeford warned “we’re changing the goalposts halfway through the match” – as Conservatives prepare to stage a revolt.
So with MPs due to vote on the move on Monday or Tuesday, what exactly is going on – and more importantly, how will it hit you?
We explain the change that’s afoot and exactly why you and your family, not just elderly relatives, should care.
What is the care cap?
The cap was announced in September as part of Boris Johnson ’s long-awaited social care plan for England.
People will not have to pay more than £86,000 for care over their lifetime, regardless of wealth.
This cap will apply to care payments made after October 2023, so the first residents will hit the cap in around Autumn 2025.
At the same time, more people will be eligible for state help to fund care.
From October 2023, you’ll get some state funding if you have less than £100,000 in assets, and full state funding if you have less than £20,000.
Currently, you pay for all your care until your assets drop to £23,250, and some of it until they drop to £14,250. There is currently no cap.
The changes are being funded through a £12bn-a-year National Insurance hike. But just £5.4bn across the first three years is going on care with the rest going on the NHS.
What has changed this week?
Tory ministers have unveiled a change that means people who receive state funding will take longer to reach the cap.
That is because only the amount they actually pay themselves – not the state help they get – will count towards the £86,000 total.
With the average care home stay lasting less than two years, this suggests many more low-income people will die before reaching the cap.
Department of Health and Social Care analysis admits this is “a change” and is less generous, saving the state £900m a year in 2027 compared to what was planned.
The change has been introduced late in the passage of the Health and Care Bill and is due for a Commons vote this week.
Who is hit by the change?
People with assets of less than £186,000 when they enter care (or in October 2023, whichever is later) risk being affected.
That is because the change affects anyone with less than £100k of assets; and those with less than £186k are liable to see their assets dip below that before they hit the £86k cap.
People who had assets of around £106k stand to lose the most.
That is because they could see their assets tick down and down, only hitting the £86k cap at the same time as their assets fall to £20k and their care becomes free anyway.
Here are some examples of that
The Department of Health and Social Care has produced an analysis.
It says a care user who started with £140,000 of assets will lose 31% of them after 97 weeks in care – the average length of stay. Under previously-proposed reforms in 2015, that same person would have lost 28% of their assets.
Department of Health and Social Care)
The difference is even starker for those who spend 10 years in care, though the government insists only 2% of care users survive this long.
A DHSC chart suggests someone with just over £100,000 of wealth will lose around 70% of it in a decade, compared to just under 60% in previously proposed reforms.
Department of Health and Social Care)
The government insists other people will be better off – and everyone will be better off than the current system.
Someone with starting wealth of £220,000 – the estimated median wealth of over-65s – will lose 38% of it over a decade. That compares to 49% under previous reform plans and 91% under the current system.
Why are poorer people hit worse?
Richer people with more assets have a far greater chance of hitting the £86k cap more quickly.
That’s because they’re paying higher monthly fees for their care, without state help making up the difference, so pay off £86k after a couple of years.
You can argue that means richer people are more likely to have to fork out the full £86k before they die, while poorer people get a subsidy. Of course that’s a fair point.
But to look at it another way, £86k makes less of a difference to a Surrey resident in a £1.5m house than it does to someone in a £100k house in Barrow.
It also means the people ‘benefiting’ from the care cap – which after all is a decision to spend billions of taxpayers’ money – are largely better-off.
Why are northerners hit worse?
Because assets include the value of your house, and northerners’ houses are far more likely to fall into the £20k-£186k bracket.
Labour research shows the average home is worth less than £186k in 107 constituencies in northern England – but zero in the south.
Labour said constituencies likely to be hit hardest include Workington (average home value £160,000), Barrow-in-Furness (£155,000), Don Valley (£155,000), Redcar (£133,000) and Bishop Auckland (£125,000).
Homeowners in the North East will be particularly badly affected, with average prices under £186,000 in nearly 90% of constituencies.
How have the Tories broken their promises?
The 2019 Tory manifesto vowed to “guarantee” that “no one needing care has to sell their home to pay for it”.
In September it became clear that that promise had been broken.
Ministers instead now pledge no one will have to sell their home “in their lifetime”, because deferred payment rules let family sell up after they die.
This latest change of policy suggests more low-income people will have to sell their home, because they won’t be “saved” by the cap in time.
What have Tory rebels said?
Some Tory MPs who won northern ex-Labour seats in 2019 could rebel. One ‘Red Wall’ MP said: ‘It’s an inheritance tax on the North.’
Tory MP Christian Wakeford slammed the care cap changes saying: “We’re changing the goalposts halfway through the match”.
He told Times Radio: “One of the main messages for introducing this levy was ‘you won’t need to sell your house for care’.
“To get to that point where unfortunately you might need to, and arguably our least well-off, it’s not something I’m particularly comfortable with.”
Former Cabinet minister Robert Buckland warned there was “a lot of concern” on the Tory benches over the plans – after angry Tories reportedly ‘monstered’ a minister on Friday.
He told LBC: “I think the Government should look again at this.
“We’re in danger of putting the cart before the horse.
“It’s far better to actually publish the social care white paper first so we can see what the new proposals are. What is the system that we’re going to be funding. Let’s have a look at that first.”