Court of Protection

National Insurance levy to fund health and social care

On 7th September 2021 the government announced the intention to introduce an additional levy on National Insurance of 1.25% to fund additional spending on the NHS and social care.  Pensioners who are exempt from paying the usual national insurance rates will be required to pay the 1.25% levy only.  Dividend tax rates will rise to 33% to ensure that all types of businesses contribute to the levy.

07 Sep 2021

The initial focus will be on funding the NHS to reduce the backlog of treatment resulting from the pandemic.  However from 2023 the funding of social care will receive greater focus.

At present care is funded by a care home resident until their assets fall to £23,250.  Under the new proposal the upper capital limit would be £100,000.  So, if a resident has less than £100,000 their care would be funded by the state.  However, a contribution from income is likely to remain.

A new lifetime limit of £86,000 is also to be introduced.  A similar proposal was made ten years ago in Andrew Dilnot’s report and a modified version was included in the Care Act 2014.  However, the Care Act provisions never came into effect as a result of local authorities lacking funding to implement the care caps.

M&P Commentary

Samantha Hamilton, the Head of the Court of Protection department at Mullis & Peake LLP, said:

“The main issue at present is the lack of funding for care, so the initial focus is intended to be on improving medical and social care provision.  In the longer term, if the proposals are implemented, it will provide some certainty about the costs of care, allowing better planning for future care needs.

“It is too early to know if this will actually be implemented, and if so, the finer details of how this would work in practice.  Watch this space!”


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