Welsh care home faces paying extra £95k in NI contributions after budget

Emily Price

The manager of a Welsh care home says the UK Government’s national insurance hike  “poses a threat worse than Covid” as it faces paying an extra £95,000 in NI contributions

Chancellor Rachel Reeves revealed a £25.7 billion change to employers’ NI in last month’s Budget, which would increase the rate of the tax and the threshold at which firms must pay.

Urgent calls have been made for GPs, dentists, hospices, care homes and pharmacies to be exempt from the increase.

Cariad Care Homes in Gwynedd says the changes will cost them an extra £95,795 in NI contributions, which equates to an additional £56 per resident, per week.

‘Huge impact’

The established care provider has 25 years in the sector, managing two nursing homes and providing care for up to 77 vulnerable people. They employ a team of 130 and have an occupancy rate of 98%.

Managing Director of Cariad Care Homes, Ceri Roberts said: “In real terms, we estimate the impact of NI changes is an additional £95,795.

“This additional amount does not take into consideration any increases in indirect costs, such as utilities, food, insurance etc. 96% of our resident are funded by the local authority or the health board.”

“We’ve had a recent legal case with the health board due to their insufficient low fees. I don’t see Cariad Care Homes being able to absorb these additional exorbitant costs.

“This will have a huge impact on our already stretched finances. I would imagine that this will also have an even greater impact on smaller care homes, with the potential of more home closures.”

Pressures

Plaid Cymru in the Senedd has called on the Welsh Government to press the UK Treasury for the reimbursement of added NI contributions costs in the public sector.

Leader Rhun ap Iorwerth said: “The public sector in Wales, including universities, GPs and the third sector are already under extreme financial pressures.

“The Chancellor’s announcement only serves to exaggerate their pressures and deepen their concern, it will worsen the situation for public sector organisations, and for the people of Wales.

“Care Homes such as Cariad Care Homes in Porthmadog provide a vital service to Wales, looking after our most vulnerable in society. But Labour’s new National Insurance proposals put those organisations at risk.

Reserved

The Welsh Government says NI is a reserved tax, overseen by the UK Government.

A spokesperson said: “We will consider our spending and tax decisions as we develop our Draft Budget in the weeks ahead.”

On Wednesday (November 20), Plaid Cymru MP for Dwyfor Meirionnydd, Liz Saville Roberts called on the Deputy Prime Minister Angela Raynor to intervene to make care providers exempt from the hike.

Raising the matter in the House of Commons, Mrs Saville Roberts highlighted the situation facing Cariad Care Homes.

She said: “Care Homes such as Cariad Care provide a crucial service to the local community, looking after the most vulnerable in society.

“Their care homes in Porthmadog and Pentrefelin have an excellent reputation for nursing and palliative end of life care.

“But Labour’s new National Insurance hike put core services like these at risk. Many will now face impossible choices.

“The increase in employer NI contributions will have far reaching repercussions across both health and social care settings, creating a perfect storm in which providers have no choice but to cut back on services as they cannot afford to keep them running.”

Responding, Angela Raynor said the UK Government valued the work of care providers  which was why “additional funding” had been made available in the Budget.

She said: “We put record funding into our NHS with increased funding into adult social care and children’s social care. We will continue to support our public services that were left on their knees by the last government.”