The Adult Social Care Plan

It won’t have escaped your notice that yesterday Boris Johnson did what countless governments before have failed to do by announcing the first framework of a plan to reform adult social care and, importantly, how it is funded.

What’s the plan?

In a nutshell: a plan to fund adult social care by tax increases coupled with a plan to modernise the social care system and better integrate it with the NHS.

What’s the cost?

From April 2022, national insurance contributions for employees, employers and the self-employed will increase by 1.25% with an equivalent increase on the tax payable on dividend income. From April 2023, this increase will be branded as the ‘health and social care levy’ and will appear as a separate entry on people’s tax records.

Who’s getting the benefit?

Downing Street estimates that an additional £12bn a year will be raised over the next 3 years as a result of these changes. Of this £36bn, only £5.4bn (i.e. 15%) is earmarked for social care. Of the remaining £30.6bn, £16bn will go directly to funding the NHS, £8.9bn will be used for what is being called a ‘health-based COVID response’ – essentially an attempt to plug the gap in NHS funding as a result of COVID, and £5.7bn will go to the devolved nations to cover both health and social care.

What happens after the first three years?

No indication has been given by Downing Street as to what the allocation of funding will be to adult social care or the NHS once the first three years have passed.

Any changes to individuals funding their social care costs?

Currently, if you have assets in excess of £23,250, you have to pay for your social care and there is no cap on the amount you may have to pay.Under the new plan, if you have assets of less than £20,000, you will not have to use those assets to fund your social care costs (although you may still be required to make a contribution from any income you receive). Those with assets of between £20,000 and £100,000 will have to make a contribution towards their social care costs on a sliding scale. Those with assets above £100,000 must pay all their fees until those assets fall below £100,000. However, crucially for those with substantial assets, there is a lifetime cap of £86,000 payable towards social care. Downing Street says this covers three years of full-time care, although given this equates to circa £550 per week, in many cases this will be much less.

Anything else?

Aside from a pledge to provide £500m over three years to social care staff training and recruitment, detail is sparse on other aspects of the plan including in relation to the promise to bring the health and social care systems together. There is the prospect of a white paper to detail the longer term plans to overhaul the social care system, but the sceptics will be forgiven for thinking they have been here before. It waits to be seen how much of this extra funding actually finds its way out of the NHS and into the hands of those who need it to make real change in adult social care.

If you would like advice on any particular aspect of the above, please contact the Care team to discuss how we can help you.