Dilnot´s £100,000 Cap Is Not What it Seems

One of the most radical features of Andrew Dilnot’s report on fairer care funding is the idea of increasing the level at which local authority funding becomes available from £23,250 to £100,000.

This needs a little more analysis as all is not what it initially seems.

The Current System

Under the current system when your assets drop to £23,250 the state starts to fund your care but they expect you to pay a tariff income which is calculated at £1 a week for every £250 you have over £14,250. At the top of this calculation you would be contributing £36 a week.

Let’s say that the local authority will fund residential care at £420 a week. Mr Jones is a typical person moving into care who has a state pension of £102.15, Attendance Allowance of £73.60, and a private pension of £30.25, giving him a weekly income of £206.

The local authority will top up his income by £274.20 a week to take him to £420 including a contribution of £36 tariff income. Mr Jones will lose his Attendance Allowance and the local authority will allow him to retain £22.60 for personal expenditure.

Dilnot’s System

In future, when Mr Jones’s assets fall to £100,000 he will be entitled to local authority care funding. The lower capital limit of £14,250 remains and so does the current tariff income calculation.

Under the new system, the tariff income is still £1 a week for every £250 you have over £14,250, so for Mr Jones the weekly tariff income is now £343, meaning that he will recieve nothing from his local authority!

Local authority care rates, which have mostly been frozen or reduced for the last 3 years, will need to increase significantly for the £100,000 limit to be anything other than academic.

Tom Scott

Director

Posted in The carefeesadvice Blog

1 responses to 'Dilnot´s £100,000 Cap Is Not What it Seems'

Nathaniel

Added 11-Jul-2011 20:50

This looks like another case of the government attempting to make these things look better than they are.

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