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You will have undoubtedly heard the news about the Health and Social Care Levy that the Government are proposing to ensure that our social care sector is funded but what does this mean for you?
The Government have put forward their plan to alleviate the backlog in the NHS and deal with the long term challenge of funding social care. The result of which is to increase the amount of tax payable. The tax increase will take place from April 2022 in the form of a 1.25% increase in National Insurance contributions. This will also affect those over the pension age in paid employment.
The new funding is designed to ensure that there will be a cap of £86,000 on the amount that anyone in England will need to spend on care costs in their lifetime as of October 2023. However, it is important to note that this does not include costs for food and accommodation in care homes. In addition, those with assets of a value below £20,000 will not have to use their savings or sell their home in order to fund their care. If you have savings/assets in the region of £20,000 - £100,000 then you will receive some means-tested support.
By way of a comparison, you are currently liable to pay the full cost of your care if you have assets more than £23,250 (and more often than not, the value of your property is taken into account).
The Bill reached the House of Lords on 15th of August following its reading in the House of Commons and has now passed both stages. A bill that has been passed by both the House of Commons and House of Lords will become law once Royal Assent has been received. There is no date scheduled for Royal Assent to date.
If you wish to discuss this further and obtain advice to enable you to plan for the future, we are here to help. Please get in touch with our specialist Private Client team on 01484 821500 or email us at email@example.com.