Key points

  • In November 2021 the government proposed an amendment to the Care Act that would mean means-tested support does not count for an individual’s progress towards the social care cost cap. The proposed amendment to how the cap will work would significantly reduce the protection against large costs.

  • Amongst older people, our analysis finds the greatest impact would be on those with modest levels of wealth. Working-age adults with modest income and significant care costs could also be significantly affected by the government’s proposed reform.

  • Under the government’s plans, those in the second wealth quintile of those aged 65 and older (wealth per person of between £83,000 and £183,000) would face the biggest loss of protection against high care costs, relative to the system under existing legislation.

  • Given that levels of wealth vary substantially across England, those in the North East, Yorkshire and the Midlands, where wealth tends to be lower, would see the biggest erosion of their protection against large care costs, as a result of the proposed amendment. 

In September 2021, the government announced that a cap on lifetime social care costs would be introduced in England from October 2023, set at a level of £86k. However, in November 2021 the government proposed an amendment to the Care Act that would mean means-tested support does not count for an individual’s progress towards the social care cost cap.  

This joint Institute for Fiscal Studies (IFS) and Health Foundation report, funded by the Health Foundation, considers the effects of the government’s proposed amendment to the Care Act. The report presents analysis of which groups of older people would be affected by the proposed amendment, looking at differences between those with different levels of wealth and income and those living in different parts of England.

Further reading

Press release

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