Health and social care levy

A message from our Chief Executive:

Yesterday was a significant day for the future of social care and I thought I would take an opportunity to share my thoughts on what it means for Wales and, in turn, what it means for Hafod.

The UK Government announced how it will raise additional revenue to fund social care and put an end to the ‘catastrophic costs’ imposed on individuals and families. This will be achieved through a health and social care levy, funded through a National Insurance increase of approximately 1.25 points and a 1.25% increase in dividend tax. This uplift is expected to raise an additional £12 billion per year for the NHS and social care. From 2023 onwards, the increase will become a separate tax on earned income, with the cash it generates ring-fenced for health and social care.

What this basically means for England is that care costs to individuals will be capped at £86,000 across their lifetime and anybody with assets less than £20,000 will have fully state-funded care. Those with assets between £20,000 and £100,000 will receive means-tested support.

But what does it mean for Wales? Wales will receive a share of this revenue, which will amount to around £700 million by 2024/25. This will add to the £1.2 billion from National Insurance Wales already receives, which is part of a health and social care budget totalling £8.5 billion.

While the increase is welcomed, the estimated costs of social care in Wales are expected to rise from around £586 million in 2017/18 to over £720 million next year. Welsh Labour committed to pursuing a UK-wide, free-at-the-point-of-need solution to social care at the elections in May 2021, but would await the UK Government’s plans before announcing their own.

The people of Wales are now expecting the Welsh Government to follow suit and introduce a similar ceiling and floor on costs, but as the matters are devolved, there is some discretion for Ministers. I will be following closely and influencing the discussions around this in any way I can.

Hafod is a major presence in the not-for-profit social care sector in Wales and our words and actions are significant. We have long recognised that the social care workforce has historically been undervalued and we have tried to redress the balance by offering better terms and conditions for colleagues and doing all we can to safeguard their well-being. The financial challenges in care are many, but we are proud of the high standards of care we deliver and the conditions we have created as an employer. These announcements will change nothing in this respect, and we will continue to do our very best by our colleagues and customers.



We provide home care services across a number of local authority areas in south Wales, which can be tailored to an individual’s personal needs and preferences. You can find out more about our care services here.