We recommend you get expert and independent advice, whether from our partners Independent Age 0800 319 6789 or another source.
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About 40% of people living in residential care are “self funders” who pay their own fees and costs. For people who cannot afford the fees, the Local Authority may fund the care, as long as the need is agreed. This funding is means tested.
Back to topWhat help may be available – Sources of funding for residential care?
Unless you have adequate capital or income of your own to pay your care home fees, financing the costs of care in old age is very complicated, and either immediately or later you may have to rely on local authority support to pay for your residence in a home.
Local Authorities usually place a limit on the level of fees they will pay, but although you may be eligible to receive funding from your local authority, you may wish to move into a home which charges more than the amount the authority is willing to pay.
In this case, providing you can find a relative or someone else to pay the balance of the fees you may be permitted to move into a more expensive home. This process of third party funding of the balance of fees is called ‘top-up’.
People who fund their own care (and also those receiving care in their own homes) may be entitled to a non means tested benefit to help with the cost known as Attendance Allowance. This is a benefit for those over 65 who need help and support with personal care, or need someone to be with them because of physical or mental disability. This allowance is not means tested and can be used to supplement the cost of care home fees paid by yourself. This benefit is also payable to those who receive care in their own home.
A number of charitable organisations may also provide financial support for care home costs but eligibility for such funding may be restricted.
Back to topResidential and nursing home costs
Typical costs vary between £600 and £800 per week (2012 prices) with charges for superior accommodation or for those in more affluent areas (e.g. parts of the South East) costing more. In Essex the average cost in 2012 is probably over £30,000 per year.
The average individual needing to move into residential accommodation is probably unable to fund such costs from cash deposits or private income and hence alternative means of funding need to be found. A soon as a move into residential accommodation is contemplated, it is essential to seek advice and plan appropriately for long-term care.
Back to topFinancial assessment
Local councils (and in certain circumstances the NHS) are responsible for managing budgets for social care, and do so by a process of means testing applied to those seeking local authority funding. In 2012, a person with assets over £23,250 must pay their own fees in full while those with less than £14,250 will have their total fees paid by their Council. Funding for those with assets between these figures is determined by a sliding scale.
Anyone seeking help with funding from their Local Authority will need to complete a Financial Assessment to determine whether or not they may be eligible for public funding.
In general, the NHS is responsible for funding ‘Continuing Care’ through the local Primary Care Trust (PCT). This refers to ongoing medical and nursing care and details of local arrangements for assessment, placements and payments can be found on the website of the relevant PCT.
Back to topYour home
A major asset owned by many individuals is their property and as this will almost certainly be valued at over the £23,250 threshold, in the absence of other convertible assets, a house owned by the individual may have to be sold to generate funds. This is the question that most concerns many people thinking about residential care.
However advice should always be sought as in certain circumstances the property may not need to be sold immediately; e.g. if a spouse occupies a family home. Although the value of your home is taken into account in the financial assessment, the law is complex and the need to sell is not a forgone conclusion.
If you have any doubts about this aspect of the assessment, we recommend that you call the advice line 0800 319 6789, or get expert information from another reputable source.
Even if you decide to fund your own care, or are not eligible for help from public funds, you may still wish to take advantage of specialist advice about the best way to manage your finances.
Back to topBenefits and grants
As you may be eligible for certain other government benefits and grants, you should also seek help in determining whether any of these may be applicable to yourself.
Back to topIf funds run out
When planning to finance residential care, it is important to look ahead and take into account the possibility that funds may run out at a future date. For this reason it may be helpful to get in touch with your Local Authority at the time of admission to discuss this possibility.
If the situation should arise, it is important to contact your Local Authority as soon as possible in order to avoid the distress and disruption that could occur if new arrangements are not made in a timely way.
Back to topDeprivation of capital
An individual may feel that in order to become eligible for local authority funding he/she can simply transfer assets he/she owns to a relative or friend, for example changing the name on the title deeds of any property owned.