A cap on the amount people pay towards social care costs in Wales is costing Carmarthenshire Council around £500,000 per year, a director said.

Jake Morgan, director of community services, said the Welsh Government has provided some additional funding to offset this but that it didn’t cover all the extra cost.

The maximum that people pay towards non-residential social care in Wales is £100 per week, even if the package of care they receive via their Local Authority costs a lot more and they have any amount of savings over £24,000, not including the value of their home. The £100 cap has been in place since 2020.

The system is generous compared to England, where people with savings of over £23,250 generally have to fully fund their social care at home.

Someone has to foot the bill though, and as providing care becomes more expensive due to inflation Welsh councils have been clawing back a smaller proportion of their costs from the individuals they support. On the flip side, some of those receiving care have benefited because the maximum financial contribution hasn’t gone up for five years.

Addressing the council’s health and social services scrutiny committee, Mr Morgan said the upshot was that the council has spent an additional £3.5 million over the past six or seven years providing non-residential social care. “That’s a real-terms cost for us,” he said.

Mr Morgan said the council received an additional £159,000 from the Welsh Government this year towards this extra cost but it didn’t cover it all.

Welsh ministers considered raising the maximum £100 per week cap last year, saying that services costing £100 in 2020 cost £121.40 three years later due to inflation. But it shelved the proposal following a consultation. A Welsh Government spokesman said: “Local authorities have received £2.5 million this year to help with the extra costs they face. Local authorities will receive an additional £5 million of funding next year and thereafter.”

Carmarthenshire Council spends more than £80 million per year on services for older people, including care home placements, and gets around £27 million back. The cost of looking after elderly people is expected to keep rising as the population ages. The council is proposing to increase social care charges in 2025-26 but this won’t affect the £100 non-residential weekly cap.

The council’s communities budget, which includes children’s as well as adult services, is forecast to overspend by £7 million this financial year although the figure could well change between now and the end of March.

The communities department is targeting savings of £4.1 million in 2025-26 through measures such as trying to keep elderly people at home for longer rather then placing them into costly residential homes. It also seeks to provide more domiciliary care itself, reducing its reliance on private care companies.

Another savings proposal is to persuade the NHS to fund the care of more people with priority health needs – a system known as continuing healthcare. Joanna Jones, head of integrated services, said the council was robustly challenging certain packages of care it was paying towards which it felt should qualify for NHS continuing healthcare. She said the authority has been successful in a small number of cases, and that it wanted to ensure that assessments for people potentially eligible for NHS continuing healthcare were carried out correctly in the first place.

Mr Morgan said a frail elderly person with complex and volatile health conditions might qualify for continuing healthcare during the afternoon but not that evening. He felt dividing these individuals’ social care and health needs on a percentage formula was “a nonsense model”. He said this wasn’t a cost argument. “It’s about the right care in the right place,” he said.