There are three kinds of financial support available from the state if you are in need of care:
Local authority funded care and how your care and financial needs are assessed
Support of NHS care
In the event that you need care, the Local Authority will assess your situation on two fronts – your care needs and your financial means to pay for your care.
Your care needs will be assessed using advice from health professionals to determine the type and level of care needed and its associated costs.
Once this has been assessed, you are entitled to choose where you buy your care. In making that decision, you should consider both private and local authority care providers and work out just how much you are going to need to spend.
Your capital and income will be assessed to establish what contribution, if any, the local authority will make towards the cost of care. The means test will take into account any bank or building society accounts, other savings and investments and, in some cases, the value of your home (see below). Income from all sources, including state pensions and benefits, will also be taken into account.
If you hold capital jointly with another person or people, your share will generally be deemed to be an equal portion of the capital, divided between the joint owners. It may be worth reviewing the way you hold any joint investments including bank or building society accounts.
If you have assets and/or capital in excess of the specified threshold or have sufficient income, you must fund the cost of care yourself. The capital/asset threshold for England* as at April 2017 stands at £23,250. If you have capital below this threshold, you may still be required to fund all or part of your fees, depending on your income.
*The thresholds differ for Wales, Scotland and Northern Ireland.
Even if you qualify for full support from the Local Authority, it is important to remember that the funding available will not always cover the full cost of your chosen care home. It will be based on the cost of places available to Local Authority funded residents in your local area.
If eligible for Local Authority help, you will receive the funding wherever your chosen home is located, but if you select a home which has better facilities or is in a better location, you or your family will need to meet the shortfall in the cost of the preferred care home. This can prove a serious drain on a family’s finances.
We strongly recommend that you get advice from your Independent Financial Adviser before you commit to any long-term expenditure to finance your care.
If you are receiving care at home, then the value of your home won’t be assessed, although the Local Authority could insist on residential care if your care at home is too expensive.
If you are seeking help for care, then your home may well be taken into account. However it may not be assessed as a joint asset if it is occupied in whole or in part as their home by:
Your Partner, or
Another family member who is aged 60 or over or is incapacitated, or
Your Child under 18
If none of the above applies, then the value of your home will be taken into account after a period of 12 weeks, to give you time to sell up. If the property is still unsold after 12 weeks, then the Local Authority will put a charge against your property so that fees it pays in the interim can be recovered from the sale proceeds.
The main benefit available is the tax free Attendance Allowance. The amount of benefit paid varies according to the level of disability; the higher rate of £83.10 per week (2017/18) is payable when care is needed both during the day and at night, and the lower rate of £55.65 per week (2017/18) is payable when care is needed either for during the day or during the night (not both). It is available if you are aged 65 and over and have physical and/or mental disability that prevents you from successfully caring for yourself. However, Attendance Allowance is not payable if your care is funded by the State. If a relative or companion is providing care for more than 35 hours per week, he or she may qualify for a Carer’s Allowance.
Other state benefits that may be payable include the Disability Living Allowance, which is paid to individuals under the age of 65 who have qualifying levels of disability. This benefit is made up of two components: the Care Component helps with the cost of the help needed for you to care for yourself and the Mobility Component helps with the cost of your mobility needs, if applicable.
These benefits are available whatever your financial circumstances, and your income or savings will not have any impact on your entitlement.
If nursing care is needed, a contribution is made towards the cost of the nursing element. This is a fixed weekly amount and is generally paid directly to the care home. Another instance where the NHS is involved in funding is in the case of people entitled to NHS Continuing Care. Typically, these people will have complex medical or nursing needs and may include people with rapidly changing conditions such as terminal illnesses. Where NHS Continuing Care is provided, all care fees are paid for by the NHS. Further detail on NHS funding is provided on our Types of Care page.
The amount of benefit you may receive in respect of NHS care is based on need rather than means, and eligibility is not affected by income or savings.
If you would like to explore the care fee planning options available to you, Contact us for a free initial discussion.