The Government plans to offer pensioners state loans to pay for their care, according to a proposal in the White Paper.
People who cannot afford to pay for their care, will be able to borrow money from their local authority under a nominal interest rate.
The debt will be paid off after they died, through the sale of their house.
The scheme, which will be introduced across England from April 2015, is intended to help over 40,000 people a year who have to sell their homes to pay for their care.
Economist, Andrew Dilnot, suggested last year in a study commissioned by the Government, that a cap should be introduced on the cost of care of £35,000 and an increased means-tested threshold of £100,000. Currently, there is no cap on the costs of care and the means-tested threshold is £23,250.
However, Health Secretary Andrew Lansley said he could not commit to where a cap should be set until the next spending review in 2013. But he said the Government agreed the “priniciple of the Dilnot recommendations” would be the “right basis for any new funding model”.
Mr Lansley said with the loan scheme in place “no one will be forced to sell their home in their lifetime to pay for care."
However Labour called the state loans “meaningless”.
Andy Burnham, shadow health secretary, is concerned that cash-strapped local authorities will implement commercial interest rates on the loans. He said: "If this is the case, taking on such large amounts of debt may be very frightening indeed for older people."
Michelle Mitchell, charity director general of Age UK said: "Much attention has been given to the deferred payment scheme, where older people take out a loan to pay for residential care against the value of their home, to be repaid with interest from their estate after death.
"A similar scheme is already operated by a number of local authorities and while this announcement usefully expands deferred payments to make them more widely available, it will not prevent older people having to sell their homes to pay for care.
"In the end, adequate funding will make or break the Government’s proposals on social care, so we will be watching closely to make sure social care remains firmly on the Government’s agenda and is not marginalised during a comprehensive spending review that everyone expects to be tight."