The Government’s long awaited and much trailed plans for social care have been announced by Prime Minister Boris Johnson.
As expected, there will be a 1.25 per cent increase in National Insurance contributions – a health and social care levy – to pay for reducing pressure on the NHS and solving the problems of funding social care. It is a move much criticised within the Conservative party and outside for breaking election manifesto promises. There is also an increase of 1.25 per cent in tax on dividends. The changes tax effect from April 2022.
The money raised will at first allow the NHS to operate at 110 per cent of normal to reduce cases backlog and then be used to fund a new cap of £86,000 on the cost of social care from 2023, reducing the risk that people will have to sell their homes to pay for help.
The levy will raise £36 billion, of which £5.3 billion goes to social care in the next three years and then directed to social care after 2025.
From October 2023 anyone with assets under £20,000 will have their care costs covered by the State. Those with assets between £20,000 and £100,000 will be expected to contribute to their care but will received State help. No one will pay more than £86,000 in their lifetime.