The government has pledged to invest £36 million over the next three years to aid recovery and reform the adult social care system so that people no longer face catastrophic care costs.
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What is social care?
Social care, also known as adult social care, is the support that is provided to anyone over the age of 18 who is unable to look after themselves independently.
This could be due to a physical or learning disability, or mental illness.
The care provided can involve help with day-to-day activities, such as washing, dressing, eating and shopping for food and provisions.
Social care services also offer support to relatives and friends who care for their loved ones by offering respite.
Care can be provided at home, whereby a carer will visit several times a day, in care homes where more specialised medical care is available, or at day centres.
In England, adult social care is separate to the NHS and is not free for everyone, with costs dependent on how much money you have and your level of need.
Those who have £23,500 in financial assets have to fund their own care, while those who do not meet the threshold will receive funding from their local council.
However, only a small proportion of social care is funded by the state, with the majority of people self-funding it, or receiving financial support from families.
What changes have been announced by the government?
A total of £36 billion will be invested over the next three years to help with recovery from the Covid-19 pandemic.
The majority of the funding will go to the NHS, with social care receiving £5.3 billion.
The investment means that from October 2023, no one will pay more than £86,000 for their social care, regardless of how much financial assets they have.
The government will fully cover the cost of care for those with assets under £20,000, and contribute to the cost of care for those with assets of between £20,000 and £100,000.
How will it be funded?
The investment will be funded through a UK-wide health and social care tax from April 2022, based on national insurance contributions paid by working adults.
This means that between 2022 and 2023, national insurance rates will rise by 1.25 percentage points.
From April 2023, the tax will appear as a separate entry on individuals’ pay slips titled ‘Health and Social Care Levy.
Unlike national insurance, the levy will also be paid by working adults over pension age.
The government is also increasing the rate of dividend tax by 1.25 percentage points to ensure people who receive income from dividends make the same contribution.
How much will I have to pay?
The Prime Minister has said that those who earn more will have to pay more.
For example, a basic rate taxpayer earning £24,100 will contribute £180 a year, while a higher rate taxpayer earning £67,100 will contribute £715 a year.
How will the NHS benefit?
Much of the money will be given to the NHS in the first three years and it is expected to help fund an extra nine million checks, scans and operations.
As for social care, it will receive £5.3 billion between 2022 to 2023 and 2024 to 2025, although less than half of this will fund the minimum floor and cap.
Around £500 million will go towards workforce and training skills, including 700,000 new training places, and increasing local authority payment rates, integration and quality.
The government is yet to provide a full breakdown for how the funding will be used.
The devolved nations will be given an additional £2.2 billion in extra health and social care spending from the levy.
MPs will be asked to authorise the creation of a health and social care tax on Wednesday (8 September) and the government will begin its consultation on social care charging reforms in October.
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