Means Testing Social Care in England

With the number of UK citizens aged 75+ doubling to 10m by 2040, social care funding remains a key public policy challenge. The Care Act 2014 included reforms designed to get social care funding onto a sustainable footing, by establishing a new level for what individuals and the state will pay in England. However, the Government has postponed its introduction until 2020 amid concerns about cost. This paper uses the delay to investigate the current and proposed method of means testing individuals and finds fault with both. It proposes an alternative formula called the ‘preferred formula’ which it argues is fairer and does not require capital limits. It suggests that the proposed life-time cap care costs could also be unnecessary since the preferred formula contains a mechanism that automatically limits asset depletion. Using examples, the research tackles a major problem with all means testing which is that it dis-incentivises saving and so prevents more money entering the care system. An annex finds that the proposed and preferred formulae are part of a wider family of means testing formulae that take into account both income and assets