Changes to the way residential social care is paid for will widen the £40 million a year funding black hole, according to a social care leader.

Mario Kreft MBE, the chair of Care Forum Wales, in principle backs the Welsh Government’s decision to increased capital limit used in charging but says the policy is flawed because it will plunge the sector into a deeper financial crisis.

The changes were announced as part of the Welsh Government’s five year plan, “Taking Wales Forward”.

The Minister for Social Services, Rebecca Evans, revealed they were more than doubling the capital limit used in charging for residential social care, from £24,000 to £50,000.

The limit will move to £30,000, as part of a phased increase to £50,000.

According to the Welsh Government, these moves are part of a wide range of measures being undertaken to improve social care in Wales, including investing an extra £55 million in the sector.

Mr Kreft said: “The principle that people should be able to retain a decent amount of their own money that they’ve saved during their lifetime has to be correct.

“The sorts of savings figures that we’re talking about are not considered these days to be excessive.

“From that point of view I would applaud the Welsh Government, but they must also ensure is proper funding for the sector.

“The problem is that there is already an annual funding shortfall of £40 million and this is unfortunately going to exacerbate an already dire situation.

“If there any loss in funding to providers due to these changes then the Welsh Government needs to make it up.

“Every silver lining has a cloud and the reality here is that local government will now have to fund any shortfall.

“This is a matter for the Welsh Government Local Association, for the 22 local authorities, and it will undoubtedly put extra pressure on them.

“Lifting the cap on the increases in the charges for domiciliary care is a step in the right direction but it does not go far enough. We need a fundamental review of domiciliary care funding so we can have a proper domiciliary care market instead of perpetuating an artificial market.

“One way or another, the only answer is to bring more money into the system and it is something that need to be addressed as a matter of urgency.

“The Welsh Government has got to make a decision about how it’s funding care sustainably going forward, and whether the additional money comes from the public coffers or whether it is going to be privately funded. We need a fundamental, root and branch review of the way social care is funded in a way that is sustainable.”

Rebecca Evans said: “Older people who have worked hard and paid in all their lives deserve a fairer deal. That is why, over the course of this Assembly, we will double the amount of money that older people can keep when in care.

“I am pleased that from today people are able to keep £30,000 without this being used to pay for care, and this will rise to £50,000 in the coming years.”

Local authorities are responsible for funding a person’s care if their capital is less than £30,000, only charging a contribution based on a person’s available income.

Anybody who thinks they, or a family member, could benefit from the new arrangements, should contact their local authority.

The Minister added: “This is a really exciting time for social care in Wales. We are starting to see the full impact of the Social Services and Well-being (Wales) Act take effect, with people across Wales really being put at the heart of their care.

“This Government has prioritised social services as a sector of national strategic importance. In recognition of this, we have announced an extra £55 million for social services in 2017-18.”