A £72,000 cap on social care costs due to come into effect in four years will be scrapped, a health minister has said, as she confirmed plans for a new consultation.
Jackie Doyle-Price said the Government would not be "taking forward the previous Government's plans to implement a cap on care costs in 2020".
In a statement to the Commons, Ms Doyle-Price said there would be a process of "initial engagement over the coming months" to shape the long-term reforms which will be set out in a green paper.
The cap on an individual's care costs was brought in following the recommendations of the Dilnot commission in 2011.
That cap had already been put into an Act of Parliament, but the Government has since announced a fresh consultation on the future system of social care.
Ms Doyle-Price said: "The Prime Minister has been clear that the consultation will include proposals to place a limit on the care costs individuals face.
"To allow for fuller engagement and development of the approach with reforms to the care system and the way it is paid for considered in the round, we will not be taking forward the previous Government's plans to implement a cap on care costs in 2020."
But Labour's Barbara Keeley accused the Government of wasting time and money, telling MPs: "The minister has today finally confirmed what many of us on these benches suspected - that they will not be proceeding with their plans to cap care costs by 2020 as legislated by this House.
The shadow health minister continued: "This is a shameful waste of taxpayers' money: over £1 million in today's money was spent in commissioning the Dilnot review and it is a waste of Parliamentary time enacting that cap.
"And it's no good for the minister to say that the Government are consulting on this cap: they consulted on this during the general election and their proposals were rejected by the electorate."
Ms Doyle-Price continued: "We need to build a longer term sustainable funding, that is why we are taking forward this debate as part of the green paper.
"And I hope that everyone with an interest in this subject gets involved in that debate because we are only going to fix this long-term if we can take the public with us."
Conservative MP Sarah Wollaston, chairwoman of the Health Committee, said a green paper that focuses "entirely on social care" would "fail to rise to the challenge" of finding a long-term sustainable solution unless it tackles health as well.
She said: "Will she be prepared, as she listens to those at an early stage that she is consulting with, if the advice from them is clearly as has been the advice for all commissions that have looked at this, that they need to consider both health and social care together, will she go back to the drawing board and start again and look at both health and social care?"
Ms Doyle-Price said: "The whole purpose of having a green paper and debate is to make sure that we do consider this issue, not in a silo but holistically."
Labour's Clive Betts, chairman of the Communities and Local Government select committee, and Tory backbencher Jeremy Lefroy (Stafford) told the minister the Government must tackle the short-term crisis in social care, as well as longer-term challenges.
"One of the reasons we're at this stage now is that the absence of long-term security means that, actually, some of these issues are crystallising rather more quickly than they ought to," said Ms Doyle-Price.
"We have made more money available to local authorities, but clearly local authorities more than any other constituency in this space are desperate for a solution."
Conservative former minister Sir Desmond Swayne said: "In the absence of provision that I might make, and indeed Dilnot might have encouraged me to make, is it reasonable for me to expect for my social care costs to be paid for by the state, and yet my heirs to inherit my substantial housing assets?"
Ms Doyle-Price said in reply: "I think he, in a nutshell, actually summarises neatly one of the debates that we have to have in this space, which is about how we ensure that people can achieve care when they need it and that it will be paid for, whilst at the same time achieving inter-generational fairness."
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