Paying for care

Paying for care, whether at home or in a residential setting, can be very expensive.

The rules about who pays for what care are complex and vary between the four countries of the UK.

Each local authority should provide information and advice about paying for care to those needing care and to their carers in their area. 

In England, Wales and Northern Ireland there are three main ways in which care costs might be paid:

• Privately funded – the person needing the care is a “self-funder”
• Local authority funded – a means-test decides how much the local authority will contribute towards your care costs
• NHS continuing healthcare funding (CHC) – when your care needs are deemed to be health care needs rather than social care needs and therefore all costs are covered by the NHS rather than the individual

In Scotland, health and social care is free, although there is a means-test for accommodation and living expenses.

Normally, an individual who has over £23,250 capital will pay privately for care.

Local authority funding is dependent on two assessments: 

• an assessment of the person’s care needs
• a financial assessment to see what financial contribution will be made

The local authority will only contribute towards care to meet eligible needs under the Care Act. 

The financial assessment is complex and the thresholds vary between countries. 

The calculation takes into account both income and capital. It is important to note that the financial assessment just applies to the person needing the care. The finances of the carer or any family member are not taken into account.

The local authority will look at the income and capital of the person requiring care to determine the weekly contribution they will need to make towards their care costs.

The local authority will contribute the difference between the person’s contribution and the total care costs.

The following elements are taken into account when income is calculated:

• Rent
• Pensions – state, private, ex-works (50% of non-state pensions can be passed to spouse or civil partner)
• Disability benefits- except mobility elements
• Notional income from capital £14,250-£23,250 at £1 for every £250

All income has to go towards fees except weekly personal expenses allowance which varies between each country and changes each tax year.

Earnings do not count as income.

If the person has capital over £23,250 then the local authority will not make a contribution.

Any capital under £14,250 is ignored. This includes:

• money in the bank
• ISAs
• Premium Bonds
• second homes

Any joint capital is treated as owned in equal shares, unless it is specifically owned differently – e.g. tenants in common with unequal shares.

Capital is valued at current market or surrender value, less 10% if there will be sale costs

Capital does not include jewellery and other personal possessions… but beware of “deprivation of capital”.

Families worry about the value of the family home being part of the financial assessment.

The home is included in the calculation if the person needing care will no longer be living there, unless at least one of the following were resident in the property before person went into care and still need the property as their home:

• their spouse or partner
• a family member or relative who is over 60
• a family member or relative under 18 whom you are liable to maintain
• a family member or relative who is incapacitated (in receipt of a disability benefit or would do if they applied for one)

The value of the home is ignored for the first 12 weeks of permanent care, so there may be a local authority contribution for those 12 weeks.

If capital, other than the value of the house is below £23,250, there are ways to borrow money from the local authority to avoid the necessity of selling the property.

In these circumstances the local authority pays the balance not met by the person’s income. These payments are known as deferred payments. They are secured as a charge on the house, or in a “loan-style agreement”.

The charge becomes payable on the sale of the property or the death of the resident.

The local authority is only obliged to meet the costs of a care home which will reasonably meet the person’s needs.

Family members can choosing to top up residential care fees through a third-party arrangement.

However, the local authority must be satisfied that it is financially viable for the third-party, for as long as the top-up is needed

The local authority retains responsibility for paying the care home.

This is assessed if someone needs nursing care from a registered nurse in a nursing home. The NHS will pay a flat rate for this.

NHS continuing healthcare funding is relevant when the primary need is for health care rather than social care.

Even though the need for care is because of a health condition, the type of care needed is usually mostly social care such as help washing and dressing, reminders and supervision to keep safe, rather than health care such as qualified nursing support. 

The application process is usually started by a health or social care professional, but an individual can request a continuing healthcare assessment from the local Integrated Care Board. There will be an initial checklist to see if a full continuing healthcare assessment is needed. 

More details can be found at https://www.england.nhs.uk/healthcare/

The assessment can be fast tracked if someone’s health is deteriorating quickly.

If continuing health care funding is awarded then all care home fees are met by the NHS, but are subject to regular review.