The government’s much-heralded Health and Social Care Levy took effect in April – with an immediate impact on pay packets.
The levy is intended to ‘end spiralling social care costs’ as well as ‘tackle COVID backlogs and reform routine services’ by raising some £39 billion over the next three years.
Boris Johnson has defended the controversial levy, which will see National Insurance contributions rise by 1.25 per cent, saying: “We know this won’t be a quick fix, and we know that we can’t fix waiting lists without fixing social care. Our reforms will end the cruel lottery of spiralling and unpredictable care costs once and for all and bring the NHS and social care closer together.”
The government has promised to reduce the impact of the NI rise by raising the threshold at which earners pay contributions to £12,570, but this will only take effect from July.
According to the government, the levy will ‘reform the social care system, backed by £5.4 billion. It will … provide a limit to the cost of care for everyone in the adult social care system for the first time, and significantly increase state support.’
The levy is intended to end what the government calls ‘unlimited and unpredictable care costs.’ While currently anyone with assets over £23,250 is expected to pay their care costs in full, from October 2023 anyone with assets under £20,000 will have their costs fully covered by the state.
The cost of care will be capped at £86,000, and the threshold at which people meet the full cost of their care is being raised to £100,000 – nearly four times higher than the previous cap.
The government has said it will earmark ‘at least £500 million’ to ‘improve recruitment, retention, progression and staff wellbeing’ in the social care sector. It aims to do this by funding professional development budgets, and increasing investment in social worker training, and mental health support.
The Health and Social Care Levy remains controversial, given the current cost of living crisis that has seen unprecedented rises in energy costs and other household goods and services.
