Department of Health social care charging structure for 2017/18

Department of Health social care charging structure for 2017/18The Department of Health has published a Local Authority Circular confirming the charging structure for adult social care in the 2017/18 financial year.

It’s interesting to note that the figures remain the same as 2016/17, with only one change, to interest on Deferred Payment Agreements.

It means the capital limits in England remain at their current level, so a lower capital limit of £14,250 and upper capital limit of £23,250.

The Personal Expenses Allowance (PEA) for local authority supported care home residents remains at its current level in 2017/18 at £24.90 per week.

The Minimum Income Guarantee (MIG) for people receiving local authority arranged care and support other than in a care home also remains at its current levels in 2017/18.

The savings credit disregards remain at their current level in 2017/18, so up to £5.75 per week for individual supported residents and up to £8.60 per week for couples. There is more detail on this in the annex of the circular.

The Disposable Income Allowance for people who have entered into a Deferred Payment Agreement with a local authority remains at its current level of £144 per week.

In terms of the interest on Deferred Payment Agreements, this is intended to be run on a cost-neutral basis, with local authorities able to recoup the costs associated with deferring fees by charging interest.

Local authorities have the ability to charge interest on any amount deferred, but cannot exceed the maximum amount specified in regulations.

The national maximum interest rate changes every six months on the first of January and July, to track the market gilts rate specified in the most recently published report by the Office of Budget Responsibility (OBR) plus a 0.15% default component (for example, gilt rate 1% plus 0.15% equals a maximum interest rate of 1.15%).

The Department of Health will not routinely publish the national maximum interest rate going forward and local authorities will need to establish what this is by checking the market gilt rate.

The market gilt rate is currently published in the Economic and Fiscal Outlook, which is usually published twice-yearly alongside the Budget and Autumn Statement on the OBR website.

The Department of Health Local Authority Circular, which is called Social Care – Charging for Care and Support, can be accessed at the link below:

Department of Health social care charging structure for 2017/18

If you have any questions about what this means for care fees planning for you, a friend or a relative, please do get in touch.

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About Martin Bamford

Martin Bamford is a Chartered Financial Planner, Certified Financial Planner (CFP) professional and published personal finance author. He works with elderly clients to provide advice on funding residential care fees, hosts the Informed Choice Podcast and is a keen ultra runner.
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