The financial impact of a living wage on adult social care budgets for local authorities is likely to be significant.
Despite plans announced in the Autumn Statement to allow councils to increase council tax by 2% for a social care precept, local authorities will continue to struggle with the costs of an ageing population.
New research from insurer Partnership in their latest Care Report has warned there could be greater financial challenges to come for local authorities.
The report found that the proportion of people who would be happy to reduce their assets below the £23,250 threshold in order to ensure councils pays for their long-term care has almost doubled in two years from 23% in 2013 to 43% in 2015.
This is known as deliberate deprivation; this is where a person has intentionally deprived or decreased their overall assets in order to reduce the amount they will be charged towards their care and support.
It means that they must have known that they would need care and support and have reduced their assets in order to reduce the contribution they would be asked to make towards the cost of it.
With an estimated 126,000 entering care each year, Partnership suggests that this could see councils shouldering up to an additional £1.62 billion burden in England alone if all of those who say they intend to spend their wealth do so.
Add this to the anticipated billion pound living wage bill and local services will be under more pressure than ever.
Councils in the South East are likely to face a greater impact than average, at £338 million as a result of the relatively high number of costly care homes in these regions.
42% of those surveyed here in the South East said they would deliberately deprive assets to qualify for local authority funding.
Partnership rightly warn that spending or giving away your wealth before you need care might seem attractive but it does limit your options and means that you are likely to have far less control over your future than you may hope.
It’s also worth noting that deliberating depriving yourself of assets or income in order to avoid paying for care fees is likely to result in the local authority investigating and treating those assets as if they were never given away.
