The economist who came up with the idea of capping social care costs has said the government’s plan to change how the cap is reached is “not welcome” as it will hit the poorest hardest.
Sir Andrew Dilnot told Sky News the change will also create a north-south divide in England and he doubts the government has allocated enough extra funding for means-testing.
The government announced on Wednesday it was introducing an amendment to the Care Act so only the amount a person personally contributes to care costs will count towards the £86,000 lifetime cap on care costs announced in September.
From October 2023, people with assets of up to £100,000, instead of the current £23,250, will be eligible for some means-tested financial support on a sliding scale.
But the new plan means any financial help a person receives from a local authority will not count towards the £86,000 total.
Sir Andrew, who proposed a cap in a report 10 years ago, told Sky News: “It would mean those who are less well off will hit the cap after much longer than those who are better off and will end up having to spend, if they have a long car journey, as much of their own money as people who are much better off.
“I think the government deserves credit for taking action here as many governments have not but this particular change has come as a surprise.
“I think it is not welcome and does have the effect of being less generous to the less well-off.”
He earlier told the Treasury Select Committee that around 60% of older people who end up needing social care have assets less than £186,000 and about 30-40% less than £106,000.
Sir Andrew said people with significant care needs and assets of £106,000 will be hardest hit by the cap changes, but it will not make a difference to anyone with more than £186,000.
The economist also told Sky News he thinks the change will create a north-south divide because it will affect people with lower value assets and there are more people with lower value houses in the North than in the South.
But, asked if the plan would disadvantage those in the North, Boris Johnson said: “No. This is a massive improvement for everybody in the whole country because what we’re saying is for the first time in history, we’re stopping people having to pay unlimited quantities for their care.”
Sir Andrew added that his recommendation 10 years ago was that the means-testing system to provide care funding for those with lower assets needed to be adequately funded.
“There’s a real doubt that the government, so far, has allocated enough extra funding for the means-testing system, that’s under enormous strain across the country,” he said.
Labour has called the amendment, which needs to be voted on by MPs, “an even bigger con than we initially thought”.
MPs could vote on the amendment as early as next week.
The government also announced in September that people with assets less than £20,000 would not have to contribute anything to their care (up from £14,250).