Finding the funding for the care home fees for a loved one can be a daunting challenge. Seeking specialist advice is important and our overview is intended to help you to plan and to make decisions.
Whatever a person’s financial status, you must request a Needs Assessment from your local authority. This will assess the benefits and allowances to which the person is entitled and will make access to them much easier. Even if an assessment decides that the person does not currently qualify for funding, it will help you to gain future funding, should your financial status change.
If your assessment determines that a care home place is required and the individual’s capital is below £23,250, then usually he or she will qualify for local authority financial support. Where the individual’s capital is below £14,250 then he or she is will qualify for maximum support.
Maximum support requires that the personal income of the individual is paid towards their care home fees – this might be their pension or their other benefits. If a resident’s capital is between £14,250 and £23,250 then that resident will pay a capital tariff of £1 per week towards each £250 of care home fees or part of that should the cost fall between. For example, if an individual’s fees are £750 per week, they will contribute £3 per week from their capital income towards that cost.
When assets (including property) total more than £23,250 then care home fees must be funded personally. Please see the section below entitled ‘Self funding’.
When a individual’s assessment determines that her or she qualifies for local authority financial assistance then you must choose a home that is suited to:
- Their assessed needs
- The terms & conditions set by the local authority
- The cost that the local authority normally pays for a person with their needs*
*needs normally fall into three broad categories: residential, nursing and dementia
When local authority financial assistance does not fully cover the preferred care home’s fees, it is usually possible for an additional financial contribution to be made by another party such as a charity or from family and friends.
Where an individual requires care, the remaining partner’s financial status is not subject to means testing and any property occupied by a partner is disregarded. Only one half of any private pension and half of any joint savings will be subject to means testing. In the interests of accelerating the process of local authority financial assistance, having separate bank accounts is the best option.
There is an NHS guide for people who have care and support needs, their carers, and people who are planning for their future care needs.
Where an individual is not eligible for local authority funding, other forms of assistance may be available.
Where an individual’s capital assets exceed the Upper Capital Threshold he or she is expected to fund their own care home fees. In some cases, it may be necessary to sell a property in order to pay care home fees and depending on capital assets the local authority will normally contribute (at their usual weekly rate) for the first twelve weeks of residence. This is called the ‘12-Week Property Disregard’ and may still require top-up payments or payments to meet the difference, once the property is sold.
In some circumstances, a ‘Deferred Payment Agreement’ is offered by the local authority. This avoids the individual’s home having to be sold during their lifetime. The local authority provides a fund that is treated as a loan and secured against the value of the property. However, the local authority may limit the value of the fund, and the fund could adversely affect welfare benefit entitlements.
Historically, at Cobham Care, we have worked closely with residents and their families who have been unable to secure a Deferred Payment Agreement and we have deferred the payment of fees until the point at which the property has been sold, subject to certain conditions being met.
An alternative option is for the individual’s property to be let, though this may not provide the guaranteed level of income required and the responsibility and costs of maintaining the property remain.
It should be noted that if you move into a care home and your property is left empty then you should receive full exemption from Council Tax until it is sold.
Big River Investment & Care provide advice and solutions for funding care. They are based in West Sussex and have a Later Life Advisor accreditation.
This is a non-means tested, non-taxable allowance, paid at the lower rate of £53.00 per week for those needing care by day or night and at a higher rate of £79.15 per week for those needing care by day and by night.
An individual receiving nursing care in a care home may be entitled to NHS-funded nursing care, which contributes towards the cost of nursing care. Where applicable, £109.79 per week is paid by the NHS directly to the nursing home as a contribution towards weekly nursing fees.
If an individual’s needs fall primarily into the category of health care, he or she may be entitled to full funding from their Primary Care Trust (PCT) following an assessment under the Continuing Health Care Eligibility criteria.
After a period of time in a care home, an individual’s available capital will reduce to £23,250 threshold. This then allows the individual to seek local authority financial assistance.
If the care home exceeds what the local authority would usually pay, then the individual faces a difficult choice between finding the cost of the top-up or seeking less expensive accommodation, a move that could be detrimental to health and wellbeing.
Where there is the potential for funding to run out, it’s critical that an assessment of an individual’s care needs is carried out through local Social Services, who then have the ability to apply for funding. Simultaneously, with plenty of notice, ask if the care home owner can continue to accommodate the individual at local authority funding assistance rates.
At Cobham Care, we are cognisant of the problem of care funds running out and the impact that this has on families. Accordingly, we have a policy of transparency and fairness in our funding arrangements with residents. We require as much notice as possible as to when self-funding will cease and will judge every situation on its individual merits. We place the health and wellbeing of our residents at the forefront of any decision.
Whilst accessing only a portion of an individual’s capital, care home fees can be met, for as long as care is required, avoiding the problem outlined above. From the outset, an Immediate Need Care Annuity can contribute towards capping the cost, thus enabling a potential inheritance to be left for the family from any remaining funds after the purchase of the annuity. Advice from a specialist care funding advisor regarding such an arrangement and/or any other financial advice relating to care is recommended.