The Government estimates the proposed change will reduce the cost of the reform by around £900 million a year.
This Insight was updated on 30 March 2022 ahead of the Health and Care Bill returning to the Commons for consideration of Lords amendments.
From October 2023, the Government will introduce a new £86,000 cap on the amount anyone in England will have to spend on personal care over their lifetime. This is part of the Government’s planned adult social care reforms (PDF).
There’s been substantial debate over how someone progresses to the cap, particularly if means-tested local authority support should count towards it. The issue is likely to be raised again when the Health and Care Bill returns to the House of Commons.
The legislative framework for a cap on care costs was included in the Care Act 2014 but the relevant provisions are not in force.
The provision means that if a local authority was financially contributing towards a person’s personal care, this spending would count towards the cap on care costs, in addition to any contribution the person made themselves.
In November 2021, the Government said it would amend the Care Act 2014 so only an individual’s contribution towards their eligible personal care costs will count towards the cap (and not any contribution from the local authority). A new clause to this effect was added to the Health and Care Bill during Report Stage in the Commons.
The Government estimates the proposed change will reduce the cost of the reform by around £900 million a year by 2027/28, which it says will allow for more generous reforms in other areas.
It has also argued the change makes the system fairer by ensuring two people contributing the same amount towards their care each week, will meet the cap at the same time. Under the original Care Act framework, people could reach the cap at different times depending on how much the local authority was contributing towards their care.
The proposal has proved controversial among stakeholders, who highlight it will most effect those with low to moderate levels of wealth (people who are eligible for means-tested local authority funding support).
In February 2022, the Institute for Fiscal Studies and the Health Foundation published a joint report on the impact of the proposed change. The report said:
During the Lords Report Stage on the Health and Care Bill, Baroness Wheeler (Labour) put forward an amendment to remove the Government’s proposed change to the Care Act framework in the Health and Care Bill (clause 155).
She argued the Care Act framework reflected a “carefully crafted…cross-party agreement” and said the Government’s proposed amendment was “a last-minute, hastily scraped together, ill-though-out mishmash…” She said the amendment would “ask the Commons to think again about how it implements the care cap” and “presents a key opportunity for fundamental reconsideration of the Government’s proposals.”
Lord Kamall, Parliamentary Under-Secretary at the Department of Health and Social Care, said basing progress towards the cap on both individual and local authority contributions to care costs was “unfair” and “considered unaffordable.” He said previous proposals for reform hadn’t been implemented because of affordability.
The amendment was agreed following a division and the clause was removed from the Bill.
On 30 March 2022 the Health and Care Bill returns to the Commons for consideration of Lords amendments. The Government has tabled a motion disagreeing with the amendment agreed by the House of Lords (PDF, see page 12). If the motion is agreed by the Commons, the Government’s proposed amendment will be reincluded in the Bill.
The Government has also tabled a number of “amendments in lieu” of the Lords amendment. These are largely technical in nature and are identical to amendments tabled by the Government at report stage in the Lords (see column 1180), which were agreed before the Lords voted to remove the whole of the relevant clause.
Further information on the Government’s adult social care reforms, including its proposed amendment to the Care Act, is available in the Library briefing, Proposed reforms to adult social care (including cap on care costs).
About the author: David Foster is a researcher at the House of Commons Library, specialising in adult social care.
Photo by Dominik Lange on Unsplash
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