Financial Advice V2
We often receive questions about paying for care; it can be a confusing subject, but there is support and information available.
Initially you can take part in our ‘who will pay for your loved ones care in a care home quiz’ for guidance, but we also recommend that you speak to an Independent Financial Advisor who can answer your financial questions in full.
Below we have also included some of the common questions we receive and some of our own advice on care home fees and how to handle them:
My mother is looking for residential care – will she have to sell her home to pay for her care home fees?
If your mother has capital of over £23,250 (in England; £40,000 in Wales) she will not qualify for assistance from the Local Authority until such a time as her capital is below this amount. Any private care fees will therefore have to be met from existing capital and income. (If she has assets below £23,250, she would get increasing help on a sliding scale down to the lower limit of £14,250, where no contribution is needed).
Most savings and assets are included in a means test, but some confusion has surrounded the subject of whether or not a person’s home is included. To help clarify the situation, a person’s home is not included in the means test if:
- a child under 16 lives in the property;
- they’re in the first 12 weeks of needing permanent care;
- care is being provided on a temporary basis.
- your parent still resides in the home;
- a relative over 60 resides in the house;
- a disabled relative lives at the property
The 12-week property disregard
As mentioned above, a persons’ property is excluded from the means test for the first 12 weeks following admission to a care home (once a permanent contract is established). This means that if their remaining capital falls inside the current threshold, then the local authority should assist you with the payment of your care fees.
It is worth noting that they will, in most cases, only pay up to their published limits, which could leave a family with what is known as a “third-party top up”, to cover any difference in actual care fees and the local authority contribution.
The money paid out by the local authority during the first 12 weeks is not normally repayable. To find out more about the 12-week property disregard, download our handy advice guide.
Deferred Payment Agreement (Government Loan Scheme)
If, after the first 12 weeks, the property has not been sold, the local authority can continue to pay towards the care fees, under the “deferred payment agreement”, but this money is repayable once the property is sold.
What if we want a higher quality care home?
You can choose a care home that is more expensive than your local council usually pays for a person with your assessed needs, but you may need to find a way to pay the difference.
If the council can suggest a place that meets your needs and you still want to move into a more expensive care home then they can ask a third party (usually a relative or friend) to pay the extra. This is called a ‘top-up fee’. You are not able to pay this yourself as you have been financially assessed to pay what you can afford.
If your local council cannot suggest a place that meets your needs in your local area then they should be prepared to pay more than their usual amount.
Will their Council Tax be reduced while we sell the home?
No. Council Tax is payable on properties left unoccupied by people who have moved to receive personal care, whether in a hospital, care home or elsewhere. Generally speaking, the residents of care homes or those whose main home is a hospital do not have to pay Council Tax.
Are there any State Benefits we may be entitled to?
Possibly, as most state benefits are means-tested. Attendance Allowance is an exception; it is a non-means tested, tax-free state benefit, payable to all individuals over the age of 65 who have needed care (defined as help with essential daily tasks, such as washing and dressing) for longer than six consecutive months.
Attendance Allowance is available at two rates; a lower rate, for those who need help during the day or the night and a higher rate, for those needing care during both the day and night. The current weekly figures (2018/19) are £57.30 lower rate and £85.60 for the higher rate.
Individuals needing care under the age of 65 will still qualify for an allowance, but this is paid in the form of a Personal Independence Payment.
What about funded nursing care?
The NHS will cover the cost of any nursing care provided by a registered nurse that a person in a nursing home is assessed as needing. This cost is a flat rate of £158.16 a week in England and £148.01 a week in Wales (for 2018/19), and is called NHS-funded nursing care (formerly known as the registered nursing care contribution).
Anyone entering a care home with nursing can be assessed to see if they qualify for NHS-funded nursing care. If they do, this money will be paid directly to the care home. The assessment is repeated annually thereafter, and it is possible that individuals will find themselves re-banded after each assessment.
Continuing Health Care
Some people with ongoing health needs may be entitled to some support from the Clinical Commissioning Groups (CCG), or Local Health Boards (LHB) in Wales. To be eligible, a continuing care health assessment is conducted by a designated nurse and is taken to a panel for discussion on whether the individual meets certain criteria. The assessment should be conducted with the knowledge and input of the resident, next of kin and other professionals involved in the person’s care. In some circumstances, the assessment process can be fast-tracked, for example when a person is diagnosed as terminally ill with a life expectancy of one month or less.
My relative needs to go into care now – what can we do?
As mentioned previously, if their capital and savings and/or income push them outside the means test thresholds, they will generally be responsible for the funding of their own care fees until such a time as their money falls below the appropriate threshold.
However, with careful planning it may be possible to structure their finances in such a way that care fees can be paid indefinitely, without worry about the money running out. Most families wish to ensure that their relative can stay in their chosen care home for the rest of their lives as well as safeguarding as much of the existing capital as possible. Speak to an Independent Financial Advisor or consider an organisation that specialises in care fees planning, such as some from the list below. Please note that we do not endorse one particular organisation.