• March 29, 2024
 Mixed reviews on Conservative social care reform

Mixed reviews on Conservative social care reform

The Conservative’s proposals to reform the current social structure has been met with both industry criticism and praise.

In their recently published manifesto ahead of the upcoming general election, the party has set out their revised plans for funding the social care system.

Currently, those who have assets of over £23,250, including property, must pay for their own residential care. Given that the affected person will be leaving their home in order to receive the care, the sale of their home is largely justified.

The situation for those receiving care at home is different; although they similarly have to pay for their care if their assets are valued over £23,250, their main residence is excluded from this valuation.

If an individuals’ total assets are valued between £23,250 and £14,250, there is a sliding scale of how much they will need to pay for their care; they will not have to pay anything if their asset value is less than the lower limit.

Under the new Conservative proposals, however, the same payment structure will be applied to both domiciliary and residential care. If an individual is assessed to have their assets – including property – valued at over £100,000, they will need to pay for their care themselves.

Although this payment can be deferred until after their death, the deduction from the estate will then impact those who were set to benefit from the inheritance.

Commenting on how the proposed policy will improve “the profile of equity release” was Stuart Wilson. The Channel Marketing Director at more 2 life expressed his positivity towards the proposal, stating that it “has the potential to be another huge growth driver for the equity release industry”. However, as the main residence is usually the greatest asset on a homeowners’ “personal balance sheet”, it’s likely to be carefully observed issue for voters. In order to fund the cost of care, he also expects that many people will move to a smaller home prior to bequeathing their property.

Disagreeing with the view was Steve Webb. Former Pensions Minister and Director of Policy at Royal London stated that the way in which people are affected will largely depend on where they live.

In areas where house prices are high, he states, families may have to pay up to two-thirds of their home value before they receive any governmental help with the cost of care.

In order to deal with this, Webb highlighted the importance of a cap on costs, stating: “If these changes are implemented, more families will be at risk of seeing a large part of the value of their home wiped out by care costs later in life. Without an overall cap on care costs, those who need care for a long period of time could see more than half the value of their home taken by care bills. Paying for care looks set to become a regional lottery.”

Georgia Owen

Georgia is the Senior Content Executive and will be your primary contact when submitting your latest news. While studying for an LLB at the University of Liverpool, Georgia gained experience working within retail, as well as social media management. She later went on to work for a local newspaper, before starting at Today’s Wills and Probate.