There’s so much to think about when it comes to going into a care home and money is often the first thing people worry about.
While it’s true that care home costs can be expensive, there are lots of ways you can manage your budgets and even get assistance with some of the costs.
We know it can be difficult, so let us do the hard work and untangle care home fees for you. In this article, we’ll look at how to get help with care home fees, funding and the different types of assistance available.
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Care homes can be paid for in a few different ways:
Self-funding - Where the person going into care, or their family or friend pays for the care costs. You will have to self-fund your care if you have savings and assets above the capital limits for care, a regular income that covers your care fees, or your means test showed that you aren’t eligible for local authority funding
Local authority funding - Where the local authority pays for all or part of the care. Relatives and friends can volunteer to pay a top up fee as a contribution to the cost of care
NHS funding - Where the NHS covers the cost of the care
If you have gone down the local authority-funded route, if your chosen care home costs more than your local authority is willing to pay, a relative or friend can volunteer to pay the difference between the local authority’s figure and the care home’s figure. This is known as a top-up fee, or third party top-up fee.
The average cost of a care home can vary greatly, depending on where in the UK you live. For example, London is one of the more expensive regions, while the North West of England was the least expensive. Care home fees also depend on the type of care you need, where you live and which care home provider owns the home. As a rule, more specialist types of care, including nursing and dementia care, cost more than residential care.
Care home costs can be broken down into rent, food, laundry, heating and other utility costs. Be aware that some care homes invoke additional charges and fees for ‘extra’ services or activities at the home. When you’re looking at a care home, make sure you go through all the financial ins and outs with care home management so you aren’t caught out by surprise costs at a later date.
If you’re worried about your finances, keep reading to find out how you can get assistance with care home fees.
If you want to get financial assistance for your care home costs, you will first need to pass an eligibility check. Eligibility for assistance with fees is done through a Care Needs Assessment, which determines that you need care provided by a care home, followed by a means test, which looks at your income and capital to work out whether you are entitled to financial support and if so, how much.
Capital limits for care count up all your savings and assets to work out your capital. It’s important to be aware of the capital limits for care in the country you live in, as thresholds vary across the UK. If the value of your capital is more than the limit in your area, you will need to self-fund your own care.
The current upper capital limits for care home funding are:
So, what makes up your capital? The following things can be included in your savings and assets capital:
This really depends on how much help you need. If you are eligible for funding assistance, your local council will calculate your total care home costs and then use your means assessment to work out how much you need to contribute. The total cost is called your personal budget and it must be enough to afford the cost of at least one suitable care home. The council will also let you know how much they are willing to contribute to your costs and arrange a suitable residential or nursing home to meet your care needs.
If your savings are below the lower limit for the country you live in, you may be entitled to the maximum funding from your local authority. However, it’s worth noting that you may still be required to contribute to your care home fees from your income, which is also worked out by the means assessment and includes things like your pension. Your whole income will be used, except for your Personal Expenses Allowance (PEA). Your Personal Expenses Allowance can be increased by the council if your circumstances require it.
Remember that the above is just a rough estimate – the best thing to do is to find out all the details of your personal finances and potential care home costs to get an accurate figure.
If you have gone down the local authority-funded route, if your chosen care home costs more than your local authority is willing to pay, a relative or friend can volunteer to pay the difference between the local authority’s figure and the care home’s figure. This is known as a top-up fee or third-party top-up fee.
If you are eligible to receive funding from your local council, you have a few options:
Local Authority Arranged – The council will pay the full amount to the home, then collect the amount you need to pay from you
Arrange Yourself – You will receive payments directly from your local authority and organise the care yourself. This can give you more independence and control over both your care and your personal finances. You can also ask family members or care professionals to manage your budget and organise your care payments on your behalf
Mixed Package – You and your local authority will arrange payment for different parts of your care split between you
To be eligible for local authority funding, you will be required to undertake the following assessments:
Care needs assessment – To apply for funding from the local authority, you will first need to complete the Care Needs Assessment, which will work out your care needs and the level of support you might need from a care home. Every care seeker has the right to a free care needs assessment, regardless of their financial situation – and if you qualify for care funding, it is the local authority’s legal duty to provide the care services you need
Financial assessment – Either at the same time as the Care Needs Assessment or just after, your local authority will also carry out a financial assessment to see whether you are able to pay for your care yourself, or whether you need funding
If you don’t agree with your local authority’s decision, or they refuse to pay for your care services, you are entitled to challenge them.
In some circumstances, the NHS will pay for your care home fees using a package known as NHS Continuing Healthcare (NHS CHC). You may be eligible for this if you have a disability, a major illness, or you have been in an accident. NHS CHC covers your full health and social care costs and includes accommodation; for example, in a residential care home. You can receive NHS CHC in a residential home, a nursing home, or even your own home.
Although you won’t have to do a Care Needs Assessment to receive NHS Continuing Healthcare, there are still strict eligibility criteria you have to pass.
NHS CHC can be included as part of a social services elderly care package.
NHS-funded Nursing Care is also available to help cover nursing home fees if you have been officially assessed by the NHS as needing nursing care. If you do not meet the criteria for NHS CHC, but require nursing care, the NHS will partly cover your nursing care costs, which are paid directly to the nursing home. This is known as NHS-funded Nursing Care or NHS FNC.
FNC Funding is decided through an eligibility assessment and to qualify, you must live in a care home registered to provide nursing care and you cannot be eligible for NHS Continuing Healthcare.
There are a few other financial support options that may be able to help you out – one of which is Attendance Allowance. Attendance Allowance is a benefit for those living with a physical or mental disability or terminal illness, who have reached State Pension age and need an elevated level of care. Care services range from help with everyday tasks like dressing and eating, where a carer visits you to check you are safe and well, to more specific care such as help getting around, taking medication, or keeping you out of danger.
There are two different rates of Attendance Allowance and the amount you may be entitled to depends on the level of care you need. As a general rule, if you only need care during the day, you will receive the lower rate, while if you require round-the-clock care, or you have a terminal illness, you will receive the higher rate. The decided amount will be paid weekly into your bank account.
You don’t need a formal diagnosis to receive Attendance Allowance, so long as you have needed help and support for your condition for six months. All you have to do is fill out a form to make a claim.
Disability Living Allowance, or DLA, often goes hand-in-hand with Attendance Allowance. DLA used to be a benefit given to those who need supervision and help with personal care. However, DLA has now been replaced by Personal Independence Payment (PIP) for disabled people and only under-16s can apply for DLA.
In terms of benefits and funding help, you may also be entitled to something called Personal Independence Payment, or PIP. PIP is for those aged 16 and over who have not reached State Pension age and can help you with everyday life if you have an illness, disability or mental health condition. If your condition has been making life difficult for three months or more – including eating and drinking, washing and bathing, dressing and toileting, you may be eligible for PIP. You can receive PIP on top of other benefits and your income and savings will not affect your eligibility.
To apply for PIP, you will need to give the Department for Work and Pensions (DWP) a call, filling in a claims form and in some cases, having a face-to-face assessment.
If your savings are less than £23,250 (in England and Northern Ireland) and your money is tied up in property assets, a deferred payment scheme can really help you out. Also referred to as Deferred Payment Agreements, deferred payment schemes mean that the local council will pay for your care home and you can repay the money later, either when you sell your home, or after your death. The value of your property will be used to pay for your fees and means you can keep your property. It’s worth noting that deferred payment schemes are only available for long-term care.
To find out whether you might be eligible for a deferred payment scheme, contact your local council. Local authorities in England, Scotland and Wales must offer you a Deferred Payment Agreement if you are eligible – as well as explaining exactly what they are and how they work. In Northern Ireland, there is no official deferred payment scheme as such, but it may still be an option. You can contact your local Health and Social Care Trust to get more information.
Due to the fact that a Deferred Payment Agreement is a loan, there will therefore be interest and administration fees to pay back on top of the original amount. We would also advise seeking information and advice from financial advice services beforehand, which can easily be found online.
Even if you are self-funding your care home fees, or you have a deferred payment agreement in place, you can still be eligible to receive Attendance Allowance and DLA or PIP Care.
There’s a lot to take in when it comes to care home fees and funding – and we totally get it if you’re feeling a little lost and confused. That’s why Lottie is here for you every step of the way when you’re choosing your care home and working out your finances. If you feel like you might struggle to cover your care home costs, don’t worry – there are options for everyone, in any situation.
We’ll make sure that you find a care home you love, at the right price for you. Contact one of Lottie’s care experts here.