Government reveals plans for cap on care costs
Plans to cap care costs for the elderly from 2016 were announced earlier this year, and the government has now detailed how this will work as part of a consultation.
The £72,000 cap is designed to help the elderly to cope better financially, but also to encourage people to plan better for old age. The government's plans also ask insurers to introduce more policies to help cover the costs of long-term care. The cap itself is double the amount recommended by a report back in 2011.
The system will work as a deferred payment scheme, whereby local authorities will pay care fees, and the money claimed back after death from a person's estate. This is to prevent people from having to sell their homes to pay for care fees upfront.
However, with such a high cap, it is only a relatively small percentage of elderly people who will benefit financially, but those that do will be the ones with the highest care needs over a longer period of time. This is because people do not tend to live very long once they have reached the level of care needed to take them over this cap. It is thought that around one in eight pensioners will benefit.
The scheme is under consultation until October.