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Care Reforms - How people progress towards the cap

For each person with eligible needs, the local authority must provide either a personal budget, where the local authority is going to meet the person’s needs, or an independent personal budget (IPB), where the individual arranges their own care. The personal budget will set out the cost to the local authority of the care they have arranged, whereas the IPB sets out what it would have cost the local authority to meet the person’s needs.

In determining a person’s IPB, local authorities should apply the same principles that underpin the calculation of personal budgets under the current system i.e. transparency, timeliness and sufficiency.

Section 18(3) of the 2014 Care Act allows self-funders to request that their local authority commissions their care, in the same way as those who are supported by the means test. It was commenced in 2015 in relation to domiciliary care and Government plan to roll this out further. Further details of the calculation of an IPB and self-funders asking local authorities to arrange their care will be confirmed under guidance early next year.

The person’s personal budget or IPB will be used to calculate the amount that will count towards the cap. For individuals who receive financial support for their care costs from their local authority, it is the amount that the individual contributes towards these costs that will count towards the cap, subject to Parliamentary approval.

Everyone will have a care account which will be maintained by the local authority and will keep track of their progress towards the cap. Local authorities will provide regular care account statements and engage early with the person once they are close to approaching the cap to discuss how their needs will be met. Further detail on care account statements will be set out in the forthcoming consultation.


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