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31 December 2014 | Comment | Article by Lisa Morgan

Care Act 2014 and the cap on care costs


Katie looks at the Care Act 2014 and, specifically, Part One which deals with the cap on care costs due to come into force in April 2016.

The Care Act 2014 received Royal Assent on 14 May 2014 and has been deemed “the most significant reform of care and support in 60 years.” Whilst there can be no doubt that the reforms contained within the Care Act 2014 pervade social care law, whether the Care Act 2014 will prove to be the “fairy godmother” of the widely reported ailing, Cinderella social care services remains to be seen.

There are five parts to the Care Act 2014 with Part One, entitled “Care and Support” containing the crux of the reforms. It details the wellbeing principle which a local authority must promote when exercising its functions. Part One also contains provisions on the assessment process to be followed in determining whether an individual has needs for care and support. Most notable, however, is the cap on care costs provided within Part One which will come into force in April 2016.

Section 15 of the Act allows for regulations to establish a limit on the amount that adults can be required to pay towards the cost of meeting their eligible needs over their lifetime, and prevents local authorities from making a charge for meeting needs (other than for daily living costs) once an adult’s care costs have reached that limit. The cap has been set at £72,000 per individual.

However, this does not mean that once an individual has spent £72,000 on care home fees that the local authority will completely fund their care thereafter. Rather, when the cap is reached is dependent upon the rate of care fees that a local authority is prepared to pay. For example, if a local council is willing to pay £500 a week for care then, for individuals falling within that local authority’s responsibility, the £72,000 cap will not be reached until 144 weeks of care have been paid for. This is true even if, in reality, an individual is paying £720 a week for their care.

Further, the cap may not even be reached in this instance (after 144 weeks) if the care fee includes the cost of board and lodging at the home. This is because the cap on care costs does just that; it places a cap on care costs only and the cost of accommodation and living expenses will therefore still need to be met by the individual receiving the care or, more commonly, their family. The “cap” contained within the Care Act 2014 will therefore prove to be somewhat disappointing for those in care homes that charge more than the rate that the local authority is willing to pay and also for those who will still be required to fund the board and lodging element of their care which can often run to hundreds of pounds a week.

The Care Act 2014 has attracted additional criticism from legal commentators for its undermining of the NHS Continuing Healthcare boundary. NHS Continuing Healthcare is a package of ongoing care that is arranged and funded solely by the NHS where an individual has been assessed as possessing a primary health need as opposed to a social need. In the case of R v. North and East Devon health authority ex p Coughlan [2000] 2 WLR 622 the Court of Appeal stated if the services provided are merely incidental or ancillary to the provision of accommodation that a local authority is under a duty to provide then the provision of those services are not the responsibility of the NHS and do not fall within the remit of NHS Continuing Healthcare.

The NHS Continuing Healthcare boundary is echoed within section 22 of the Care Act 2014 and Paul Burstow MP, former care services minister, has been at pains to point out that, “the provisions in section 22 are not intended to change the current boundary… and we do not believe that they will have that result. The limits on the responsibility by reference, as now, to what should be provided by the NHS remain the same.”

However, within the Care and Support Statutory Guidance issued under the Care Act 2014 in October 2014, it is stated under the heading “NHS Continuing Healthcare” that, “…local authorities cannot arrange services that are the responsibility of the NHS… However, the local authority may provide or arrange healthcare services where they are incidental or ancillary to doing something else to meet needs for care and support…” As noted by Professor Luke Clements, whilst this is strictly correct it is not so for people who are eligible for Continuing Healthcare for whom social services cannot provide or arrange any services.

The presence of this sentence within the Guidance under the heading “NHS Continuing Healthcare” has therefore been criticised for creating confusion regarding the boundary between the provision of services that the NHS is under a duty to provide and those which are the responsibility of social services.

Such added confusion to the NHS Continuing Healthcare system, already crowded with families at a loss as to what their relative in a care home is entitled to either from the NHS or social services, is most displeasing. Having worked in the Nursing Care Department at Hugh James for the past three years I have first hand experience of the complexity of the current NHS Continuing Healthcare assessment process and the frequency with which individuals are incorrectly assessed as being entitled to means-tested services from local authorities rather than NHS Continuing Healthcare.

Therefore, whilst the Care Act 2014 most certainly is a step in the right direction in reforming social care law, the confusion that its Guidance creates between the responsibilities of social services and the NHS is disappointing. This, in conjunction with the new “cap” on care costs not being as clear cut as first appears, is only likely to result in further hardship for those in care homes as well as their families.

Author bio

Lisa Morgan is a Partner and Head of the Nursing Care department. She is regarded as an experienced and specialist solicitor leading in the niche area of continuing healthcare.

She has been instrumental in developing a niche legal department in Hugh James, which comprises of 40 fee earners who solely act for the elderly and families in recovering wrongly paid nursing fees.

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.

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