The Conservatives have revealed their plan for reforming funding of long-term social care, by adjusting means testing and scrapping a proposed cap on all individuals’ lifetime costs.

Theresa May said the proposals reflected “a commitment to get to grips with the great challenges of our time and to take the big, difficult decisions… It is the responsibility of leaders to be straight with people about the challenges ahead and the hard work required to overcome them”.

The party – ahead of publishing its full manifesto later today – also said there would be “far-reaching system improvement to improve co-operation between the NHS and the care system, relieve unnecessary and sometimes unhealthy stays in hospital and examine how to make best use of specialist housing and new technology”. No detail has been given on what this means.

The Tory party statement to media said it would “take immediate action to deal with the pressures in the social care system”, although dates have not been given.

The plan abandons the recommendation of the 2011 Dilnot commission, previously supported by the Conservatives but not yet introduced, of capping the total of what any individual must pay for their long-term social care. This makes the reforms cheaper but some will argue undermines their aims and could mean the long-standing problem of social care funding persists. It has been criticised this morning by Sir Andrew Dilnot for failing to provide for individuals to pool the risk of huge care costs.

The proposals involve:

  • Means testing winter fuel payments… “and transferring the money raised directly to health and social care”. It is not thought there are any changes to NHS budgets intended in the announcement.
  • Including the cost of people’s homes when means-testing to decide whether they must pay for domiciliary care – as currently happens for residential social care – to raise additional income.
  • “introducing a single capital floor, set at £100,000, below which their assets will be protected from social care costs” – up from the current floor of £23,250.
  • Extending deferred payment agreements – under which people pay what they owe when they sell assets or when the die – to domiciliary care. The Conservatives said this means “no one… has to sell their home within their lifetime, or the lifetime of their surviving partner if they live together”.
  • The party will also give people the right to request unpaid leave from work to care for a relative for up to a year.

Its statement said its plan will “make the social care system fundamentally fairer, better funded and more sustainable, helping to ensure elderly people receive the dignified and high quality care they deserve”.

“this is something successive governments have failed to tackle, leaving a system that is not working for hundreds of thousands of people receiving care or the organisations providing it,” it said.

As well introducing new costs for people with assets above £100,000 receiving domiciliary care, and removing the winter fuel payment for some, the announcement means the party is dropping its earlier commitment to capping people’s total care costs, which was broadly supported in the sector.

The Tories said in their 2015 election manifesto that they would introduce the cap, but put forward no way of funding it, and shortly after the election said the cap would be delayed until 2020.

Ms May has been under pressure to act on social care since becoming prime minister. She introduced a “council tax precept” meaning local authorities can raise more, instigated a review of social care funding and policy, and announced some additional short-term funding to local councils for care earlier this year.

She has also said there must be more consistency in standards of care commissioning and provision, and better integration between health and care. Later this year the Care Quality Commission is due to carry out inspections focused on this in 20 areas.

The Association of Directors of Adult Social Services said in a comment released later on Thursday: “ADASS very much welcomes the recognition across the political parties of the importance of supporting older and disabled people and their carers to live dignified lives with the high quality social care and support they need in the place they want to be…

“Any future charging arrangements for domiciliary care need to be fair, but also guard against unintended consequences of encouraging people to delay gaining the help and support they need to prevent high cost hospital and care home admissions.

“We would welcome understanding how the sustainability of the social care system is assured overall, including how much additional government funding is envisaged alongside these increased charges to individuals and how the profound regional variation in the value of homes will play out in the context of a single capital limit. 

“The pressures on the social care system are significant and rising. Extra money in the short term has been welcome. The gap in funding by the end of the decade is estimated to be in the region of £2.5bn – there is a need to deal with this funding gap and for any new government to act urgently to give confidence to many thousands of people in this country and their families who need and depend on social care.”

Updated on 19 May to include ADASS comment.