Cap on care costs: government change reducing benefit for less wealthy becomes law

A government change reducing the cap on care costs’ benefit to less wealthy people has become law, following a parliamentary battle.

Opposition peers failed to prevent the change in a vote last night in the House of Lords.

As a result, the Care Act has been amended so that only client contributions – rather than the full costs to the local authority of personal care – will count towards the £86,000 cap, for people receiving means-tested support.

Anyone who hits the cap, which comes into force in October 2023 and will also apply to self-funders, will thereafter receive free personal care.

The government says its change will save £900m a year.

Hit to less wealth and those in poorer regions

However, research by think-tanks the Health Foundation and the Institute of Fiscal Studies found that this would leave people with lower levels of wealth and in poorer regions with significantly reduced protection against “catastrophic” care costs, contrary to the purpose of the policy.

It is also contrary to the blueprint for the cap set out by the Dilnot Commission in its 2011 report, under which the full costs to the local authority would count for people receiving means-tested support, meaning they would hit the cap more quickly than under the government’s plan.

Parliamentary battle

The House of Lords had twice blocked the government’s amendment – which was first added to the Health and Care Bill in November 2021 – twice.

However, this was overturned both times by the House of Commons and, last night, the government defeated a final bid by opposition peers to prevent the amendment going through.

The Health and Care Bill will now become law, having been agreed by both Houses of Parliament.

It also includes provisions to reintroduce performance assessments of council adults’ social services and remove the system by which councils can be fined for delayed discharges from hospital they are deemed responsible for. This will now be scrapped to support the government’s implementation of the discharge-to-assess approach, under which people are assessed on any care and support needs they may have after leaving hospital.