How Care Is Funded
Making the decision to place someone into care is not an easy one and can be exacerbated because of the sometimes complex financial issues that need to be addressed. Broadly speaking, the process of funding care home fees depends on how much money the person needing care has in terms of overall capital (savings and property). The process is usually referred to as a means test and follows a care needs assessment.
Certain income such as some types of disability benefits and pensions may not be counted within the means test and this is the same for some forms of capital as illustrated below.
The NHS may contribute towards the cost of care if the person has significant healthcare needs. The care home placement may be free if you are eligible for NHS continuing healthcare where you require care primarily because of the nature of your medical condition.
Those who have more than £23,251 of capital
If the person needing to go into care has over £23,251 in capital then their place in a care home will need to be self-funded until they reach the threshold of £23,250 at which point Local authority care funding will take over.
Their house is counted as part of their capital unless:
● A spouse or partner still lives in the house
● A relative aged over 60 lives in the house
● A disabled relative lives at the house
● A dependent child aged 18 or under lives in the house
● The person is in the first 12 weeks of needing permanent care (12-week property disregard)
● Care is being provided on a temporary basis
Once capital has reduced through self-funding to the £23,250 threshold, then you will need to contact your local authority to arrange funding, as explained below.
In some instances, the need for care can come quite suddenly, and so you may need to find a care home more quickly than this funding can be arranged. In this instance if the Local Authority is not prepared to put in place a 12 week Property disregard solution, Field House offers a Property & Asset Disregard service (link to Property & Asset Disregard article), allowing you to stay at the home without paying fees – these are deferred for an agreed period giving you a breathing space to put the financial arrangements in place.
Those who have under £23,250 of capital
If the person needing care has less than £23,250 in capital then their care home fees will be paid by the local authority. In this instance, your first step should be to contact the Adult Social Services department of your local authority who will come and complete a care needs assessment of the person, identifying their needs and advising how much they will pay towards their care.
Regulations state that you should then be offered a choice of three homes that qualify for local authority funding for care homes, but in some areas, the Local Authority does not automatically do this and you may need to ask them to provide other options. You can then visit the homes and make an informed choice between them.
For some homes, if they have high occupancy already they may require a top-up on the local authority agreed fee in order to accept the placement.
Equally, if you have a particular home you prefer that isn’t one of those provided by the local authority you have the right to choose a different council-funded care home subject to a few conditions. The local council must try to arrange accommodation in that home providing that:
● the home is suitable for your assessed needs
● the home or organisation is willing to accept the local council’s terms
● costs are in line with what the council would normally pay
● it is a UK care home
You can choose to self-fund the difference between the local authority funding and the homes offered rate.
Those close to £23,250 who will soon be eligible for funding
If the person needing care is close to reaching the capital threshold and their Care home funding will soon fall under the local authority then it is advisable to contact your local authority with several months to spare in order to have funding in place once you will need it. This typically happens when the person will reach the threshold within 6 months, so in the region of £45,000.
At this point, you will follow the process outlined above for those with under £23,250 of savings.
Deprivation of assets
Care should be exercised with how the person handles their financial affairs prior to requiring care home accommodation. Giving away savings, income or property to relatives or charity, for example, can be seen as deprivation of assets. The council, in this case, may assess you as if you still had the money or property.
Do You Need Independent Financial Advice?
If you need advice or help managing your finances then Field House Private Care Home can suggest Bespoke Advice Services who offer Financial support for residents and relatives to help you navigate the process. You can also contact Age UK or Age Concern who can offer support and additional information.
Age UK has produced a factsheet which has information about the financial help that may be available from the local authority and also covers arranging and paying for care yourself.