Health and social care levy (tax)
If you are making National Insurance contributions, these will rise by 1.25% from April 2022. This is to help fund NHS services.
From April 2023, this extra contribution will be split out from your National Insurance contributions and will be called a health and social care levy. It will appear separately on your tax record.
If you are working and you are above State Pension age, you will need to pay this levy from April 2023.
It will be used to:
- help support NHS services – by reducing waiting times for surgery, scans, and other procedures, for example
- fund changes and improvements to the NHS and the social care system.
New rules for when people will pay towards their social care services
The government’s proposals affect how much you will pay for personal care services. Personal care includes help with things like washing, dressing, eating and taking medication.
How much you will pay will depend on your capital and whether you receive care at home or in a care home. Your capital includes things of financial value, such as your property, savings and investments.
The government’s proposal is that from October 2023:
- if you have capital of less than £20,000 you will not have to pay towards the cost of your care from your capital, but you may have to contribute from your income
- if you have capital worth between £20,000 and £100,000, you will have to pay some money towards the costs of your care, but your local council may also contribute towards the costs. The details of how this will work have not yet been set out
- If you have capital over £100,000, you will have to pay for all of your care.
If you are paying for some or all of your care, the amount that you will spend on personal care services in your lifetime will be limited to £86,000. This does not include the cost of accommodation or food.
How does paying for social care services work now?
At the moment, if you have:
- less than £14,250 – you don’t have to use any of your capital to pay for your care
- between £14,250 and £23,250 – you pay a contribution towards your care, and so does your local council
- more than £23,250 – you may have to pay for all the care you receive.
There is currently no cap on the total amount people can pay towards their social care costs.
See our webpages on paying for care for more information.