The Health and Social Care Levy has recently come into effect in the UK, as of April 6th, 2022. Back in September 2021, the UK Government announced their plans for the levy, allocating £5.4 billion to invest into adult Social Care over the next three years.
Following this, in December 2021, the Government released its “People at the Heart of Care” Adult Social Care Reform white paper which outlined the main areas that this funding would support.
In combination, these two publications set out the Government’s future visions of Health and Social Care.
So, what is the Health and Social Care Levy, and what does it mean for you? How will it impact individuals under social care services? This article looks at everything you need to know.
The Health and Social Care Levy consists of a temporary 1.25% increase to the main National Insurance contributions to begin with, as well as the additional rates for Class 1, Class 1A, Class 1B and Class 4 National Insurance contributions during the 2022-2023 tax year. As of the 6th of April 2022, this increase came into effect.
Once the 2022-2023 tax year ends, National Insurance contributions will revert back to the 2021-2022 tax year level, and as of 6th April 2023, the 1.25% Health and Social Care Levy will come into effect.
The Government has described the objective of the Levy as follows: “All parts of the UK need a long-term solution to funding Health and Social Care. This levy provides a UK-wide approach which enables us to pool and share risks and resources across the UK, leveraging the benefits of the Union for all our citizens.”
The Health and Social Care Levy will impact anyone who is liable to pay National Insurance contributions, excluding those who only pay Class 2 and Class 3 National Insurance (self-employed individuals, and individuals who are paying voluntary NICs.)
People will be impacted differently depending on their current circumstances. The Government has estimated the average yearly increase based on the median income for each tax threshold:
“In 2022 to 2023 tax year an individual earning the median basic rate taxpayer’s income of £24,100 would be expected to pay an additional £180; and an individual earning the median higher rate taxpayer’s income of £67,100 would be expected to pay an additional £715.”
Individuals on a lower salary and those who are only just making ends meet will be impacted the most, as they will see a reduction in their disposable income, and this could, unfortunately, push more people onto or below the poverty line.
The introduction of the Health and Social Care Levy will also have an effect on many businesses that will need to implement the change, including updating employee payroll records and software systems.
The Health and Social Care Levy will be used to generate funds that will be invested into the NHS and Health and Social Care sector. The main areas within care that will be tackled include prevention and support, technology, housing adaptations, and training and innovation.
The levy will also end unlimited, unpredictable care costs. From October 2023, no one in England will be required to spend over £86,000 on their personal care within their lifetime. Anyone with assets under £20,000 will be entitled to their care costs being fully covered by the state, and the upper limit at which people are required to cover the full cost of their care will increase from £23,250 to £100,000.
Another key area that the funding will help tackle is the Covid backlogs and waiting list times. Since the start of the pandemic, waiting lists have become longer and the number of people waiting for elective care has risen from 4.4 million pre-pandemic to over 6 million, and is expected to continue rising.
The Government say that the levy will “reduce waiting times and deliver millions more scans, tests and operations, while reforming the way routine services are delivered”.
The King’s Fund, an independent charitable organisation working to improve health and care in England, offer a realistic viewpoint, questioning whether the levy will really be enough to reform Social Care.
The Royal College of Occupational Therapists (RCOT) has welcomed the news as it will lead to increased funding for the NHS and Social Care.
Steve Ford, Chief Executive of RCOT comments: “It is now the time to improve access, quality, and levels of Social Care and rehabilitation support, so that those who need it receive the care they need, when they need it.”
A point raised by both The King’s Fund and the Royal College of Occupational Therapists is that there are issues within the Social Care sector that won’t necessarily be fixed simply by increasing funding. The main concern highlighted was a shortage in the workforce across the sector. Whilst funding has been allocated to recruiting, training and retaining staff, and the Government recently launched their #MadeWithCare campaign to drive recruitment in the sector, the general thoughts across the sector are that more needs to be done to tackle the workforce shortage.
The King’s Fund commented: “…as the funding gap recedes, without an accompanying workforce plan, this will not deliver the goods.”
The Health and Social Care Levy will raise much-needed funds that will be used to improve Health and Social Care services, however deeper thought needs to be put into specific areas such as recruitment. It is also important to understand how the funding will continue after the allocated 3 years, and whether Social Care will remain a priority.
It will be interesting to see the impacts of the Health and Social Care Levy across the Health and Social Care industry over the next three years, and this time will also allow for improvements and areas of further concern to be highlighted.
We hope to see the 3 main objectives highlighted in the Government’s “People at the Heart of Care” white paper achieved through the funding from this levy, meaning that everyone will have choice, control, and support to live independently, with high quality tailored care and support. And, most importantly, Adult Social Care will be fair and accessible for all individuals who need it.
Photo by micheile dot com on Unsplash.
