A guide to obtaining the funding for residential care placements
The way care and support services are funded in the UK is constantly changing, with £72k lifetime caps and more generous upper limits for means testing set to come in from April 2020. Going into care can already be a stressful process, making a clear approach more important than ever.
How much does residential care actually cost?
This can vary greatly depending on the level and type of support needed. The average costs of care in the South East are around £33k per year for standard residential care, which can rise to around £45k for nursing care, compared to the North West where costs are around £25k for standard care and £35k for nursing care.
Typical factors that can impact costs include:
- Permanent or temporary care
- Home care or residential placement
- Whether the home is independent or an NHS home
- Individual fees
So how does funding for permanent placements work?
Once your Local Authority has assessed you under the Care Act 2014 as needing care, either home-based or within a dedicated residential care placement, the next stage is to be assessed for financial support and to determine whether you qualify for any state funding.More on the Care Act 2014 »
What's the difference between state funding and self-funding?
Most people pay something towards their care but how much can vary depending on individual circumstances. Care home funding in the UK is means tested, based on nationally set guidelines, and is not usually free, unlike medical care on the NHS that is free at the point-of-need.More on Government means testing »
What am I actually entitled to?
I have total capital below £14,250
This means you will be entitled to the maximum support offered.
I have total capital above £14,250 but not exceeding £23,250
You will be entitled to some assistance. After a financial assessment, the local authority will assess your specific needs, working with social services, and determine how much financial support you qualify for. You may also pay a capital tariff of £1 per week on every £250 between the lower threshold of £14,250 and the upper threshold of £23,250. Your local authority will also help with the first 12 weeks of your care costs.
I have total capital exceeding £23,250
In this case your local authority will not offer financial support with your care costs and you will be expected to self-fund your placement. A person's home is considered an asset and is looked at by the local authority within the means test. This is an assessment of all income and assets, including property, by your local authority to determine if you are eligible for financial support.
If I am self-funding, will I have to sell my house?
Homes are taken into account with total capital and it's true that many people going into care do sell their houses as most people will not have the money to pay for care from pensions or other regular incomes. However you should consider all options first and seek the advice of an independent financial advisor.
- Renting your property to generate an income
- Reinvesting the capital from a sale into low-risk bond investments
Does anything get disregarded?
Benefits and credits are disregarded as is Disability Living Allowance, War Widows' special payments and income from savings.
What about jointly held capital?
If you jointly hold capital, you and the other joint owners are treated as having equal interests. There is an exception for jointly owned property, which is calculated in terms of the present sale value of your beneficial interest. This means the part you own that could be sold with the proceeds of sale going to you. For instance: if you have a joint bank or building society account with your spouse you will be assessed as having half of the balance of the account.
If you are concerned about successfully handling the transition
of an older person into care,
please contact Caring Homes to see how we can help.