Boris Johnson will be hoping Conservative MPs will back his plans to fix social care in England on Wednesday.
The Prime Minister went back on his election promise by raising national insurance contributions to deal with the backlog in the NHS built up during Covid and to deliver long-overdue reform of the social care system in England.
What did Boris Johnson announce?
A UK-wide 1.25% health and social care levy based on National Insurance (NI) contributions will be introduced, ringfenced for health and social care.
It will also apply to people working above the state pension age.
The UK Government will increase dividend tax rates by 1.25% to help fund the package.
Boris Johnson said the state should target its help at protecting people against the “catastrophic fear of losing everything to pay for the cost of their care”, adding: “That is what this Government will do”.
How will the changes keep costs low?
Currently, anyone in England with assets over £23,250 must pay for their care in full.
From October 2023, people starting adult social care in England will pay no more than £86,000 for their own care over their lifetime.
Those with assets under £20,000 will not have to make any contribution for their care from their savings or the value of their home. People with between £20,000 and £100,000 will be eligible for some means-tested support.
How will the National Insurance rise affect my payslip?
Additional contributions will be shown on payslips.
A typical basic-rate taxpayer earning £24,100 will contribute around £180 in 2022-23, while a typical higher-rate taxpayer earning £67,100 will contribute £715.
Someone on a £50,000 salary, meanwhile, could pay just over £500 more in annual NI contributions next year, while an earner on £20,000 could pay an extra £130.
A worker on £100,000 could see their contributions increase by more than £1,000 next year while someone on £30,000 could see contributions increase by around £250.
Who will not have to pay extra?
The Government said the progressive nature of the levy meant that 6.2 million people earning less than a threshold of £9,568 in 2021-22 will not pay the levy.
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