Proposed Social Care Changes - In Brief

The government have announced plans to overhaul the way social care is funded in England.

What is being proposed?

  • People will no longer pay more than £86,000 in care costs - that is, for actual care, rather than accommodation - over their lifetime, from October 2023
  • Once people have reached this cap, ongoing costs for personal care will be paid for by local authorities
  • Those with between £20,000 and £100,000 in assets will get means-tested help towards costs from their local council
  • Those who own less than £20,000 will not have to pay towards care costs from their assets at all, but might have to contribute from their income

How will the changes be funded?

  • National Insurance (NI) - which working people and their employers pay to ensure benefits like the state pension - will rise by 1.25% from next April
  • From April 2023, this extra payment will become a separate tax - called the Health and Social Care Levy - on earned income. It will show up separately on payslips
  • The levy - unlike NI - will also be paid by people who continue to work beyond retirement age
  • The government says the changes will cost £255 a year for someone earning £30,000, and £505 a year for someone on £50,000
  • Shareholders will also have to pay 1.25% more in tax on the profits they make

How much will all this raise?

  • The changes are expected to raise £12bn a year
  • The government says that, for three years, all the money will go towards easing the NHS backlog, before more of it is moved into social care

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