Care Home Costs – The 12 key questions answered
Answered below are some of the regular questions we get asked about paying for care home fees.
Question 1 – Can I get financial help towards meeting my care home costs?
The financial support available will depend on what assets you have, but if you live in England and have savings of more than £23,250 then paying for care will be your responsibility.
At present, any care will be means-tested, which means the more money you have, the less financial support you potentially can receive. However, if you have what is called a continuing care need, then the NHS may be able to fund all your care. However, to receive this you need to have a ‘primary heath’ need.
Before you move in to a residential care home, your local authority will undertake a financial assessment, which will look at your income, savings and assets and then calculate how much you will need to contribute towards your residential care home fees.
2 – How is my capital assessed when working out how much I have to pay towards my care home fees?
If you live in either England or Northern Ireland and has capital of less than £14,250 (based on 2016-17 rates), you will be entitled to maximum financial support.
Anyone receiving full funding will have to contribute all of their income (including benefits, which they must claim) to the local authority, except for the personal expense allowance.
If you have between £14,250 and £23,250 in capital, you have to contribute towards your fees. You will have to pay £1 for every £250 of your savings between £14,250 and £23,250. This is known as ‘tariff income’ and they will also need to contribute all of their income towards the fees, except for the personal expenses allowance.
As explained above, if you have capital of more than £23,250, you will need to use that capital to pay the full cost of your care. If you have less than £23,250 in capital, but a weekly income high enough to cover your care home fees, you will be liable for all of your care home fees.
3 – What is the savings threshold before I have to pay all my own care fees?
If you have savings and assets of more than the amount in this table, you’ll have to pay for your own residential care. It also worth noting that the savings threshold for 2016/2017 differs depending on which part of the country you live:
Northern Ireland £23,250
4 – What savings count towards the £23,250?
When your local authority assesses you to see if paying for care is your responsibility, it will look at things such as:
- The value of your property – although this is excluded if your partner or close relative still lives there
- The value of any private and State pensions
- The value of any savings and interest you earn from those savings
- Some benefits like Pension credit, Attendant allowance or the care component of Disability Living Allowance.
4a – If you have assets and savings GREATER than £23,250
If you have been assessed as having more than £23,250 in assets then paying for your care will be your responsibility. But there may be some alternative options to consider. See next question.
5 – Are there any alternatives to paying care home fees?
An alternative option to consider is receiving care in the home from a home care provider. This means that you stay in your own house and you have people come and look after you there. This is increasingly becoming a popular option as this is much cheaper than going in to care home and allows you to remain in an environment where you are comfortable and familiar.
6 – How can you pay your care home fees
It is really important that you firstly ensure you are getting all the benefits and credits that you are entitled to. You then need to ensure that you look at all your assets and savings and think carefully about how you will use them in the most efficient way.
If you don’t have the money readily available to pay your care costs there are a number of options that you can consider.
7 – I thought the government were going to cap the amount I had to pay for my care?
The government intended to introduce a cap on the amount you would have to pay towards your care home fees. The cap was going to be set at £72,000 and was due to be implemented from April 2016. However, this is now no longer the case and the introduction of the cap has been pushed back to at least 2020. Therefore, if you currently have savings of more than £23,250, you will have to fund all your care home fees.
8 – What happens if you give away your assets so you have less than £23,250?
If you give away some of your assets as a gift, say to your children, and then look to claim assistance from your local authority, they may well say that you have done this deliberately to avoid paying for your care costs.
This is called ‘self deprivation of assets’ and the local authority may well undertake your means testing including the value of assets that you gave away.
This is a complicated area, but doesn’t mean you cannot pass assets to family and friends – Please speak to a specialist financial advisor who will be able to talk you through the options and help you with your financial planning
9 – If you have assets and savings LESS than £23,250
If you have been assessed as having less than £23,250 in assets then the costs of your residential care will be met by your local authority.
10 – Will your Local Authority pay all your residential care and nursing costs?
As part of your assessment, your local authority will arrange a suitable residential care or nursing home for you.
If you have been told that the local authority will help pay towards your residential care, then they will also tell you how much they are willing to pay towards the cost of your residential care. You should remember that this does not mean they will always pay for all your residential and/or nursing care.
Your local authority will have a set amount that they are willing to pay towards to cost of your residential care costs. However, you can choose an alternative care home if they charge the same price.
11 – Can you move in to a more expensive care home than the one your local authority suggests?
Paying for care means that you have some discretion over where you go. You can choose to move in to a residential care or nursing home if it is more expensive than what your local authority will pay. But, you will need to pay the difference in the care home fees.
If your local authority will only pay £500 per week but the home you have chosen is £700 per week, then you will need to arrange for someone to pay the additional £200 in care home fees.
You will not be able to pay this if your assets are less than £23,250. The additional amount is usually paid by a third party (usually a friend or relative) and is called a ‘third party contribution’.
12 – Can I avoid paying care home fees
As you can see from above, it is hard to avoid paying fees. However, by planning your finances efficiently, you can mitigate some of the impact. Read our section on how to avoid care home fees.
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