If you require extra support so that all your care needs can be met then your local authority may contribute some or all of these care costs. In this case, a financial assessment will be performed to determine whether the local authority should help you with these care fees. Also known as a means test, your capital, income, property and investments will be looked at.
This article will guide you through the process of getting a financial assessment for care fees, including whether you’ll have to pay and how to prepare/apply.
Use our directory to find a care home near you.
When it comes to paying for care, there are upper and lower saving thresholds. These thresholds depend on where you live in the UK. If you or your loved one have savings and assets that exceed this upper limit then you’ll usually have to pay the full cost of care.
However, if your capital falls below the lower threshold then your local authority may fully cover the cost of your care.
In some cases, your savings and assets will be somewhere in between these upper and lower thresholds. Here, you’ll likely qualify for some funding but be expected to cover the rest yourself through self funding.
Here are the UK saving thresholds for care home fees in 2022/23:
Upper threshold: £23,250
Lower threshold: £14,250
Upper threshold: £28,750
Lower threshold: £18,000
In Scotland, personal and nursing home care is free for those who have been assessed as needing it. Here, you can also claim payments to cover these parts of your care home fees. Other costs like food and accommodation aren’t covered.
Upper threshold: £50,000
Lower threshold: N/A
In Wales, there is only an upper limit. If you have savings and assets worth less than £50,000 then you’ll receive the maximum support from your local authority regardless.
Upper threshold: £23,250
Lower threshold: £14,250
Your local authority or council will carry out a financial assessment or means test to help determine who will pay for your care and support. This assessment will differ slightly, depending on what type of care service is required. For example, if you’re living at home, the test will be slightly different to how it would be when living in a care home.
When this means test is conducted, your savings, eligible income, stocks and shares, investments, and equity from your property (if you own one) will be added up, before any debts such as your mortgage are subtracted to provide a total. This figure will show how much you need to pay for residential care.
Most benefits will be counted as income, while personal possessions and life insurance policies are excluded.
Every person that’s assessed is treated as an individual and only their income is taken into account, irrespective of whether they’re single, married or living with a partner.
The person conducting the assessment will likely ask you (or your carer/relative) to complete some forms regarding your finances and declare that the information is true.
When you move into a care home or nursing home, the value of any property which you own will be factored into the financial assessment. This will make it more likely that you’ll have to partially or fully pay for your own care.
In England, local councils will generally help people pay for care costs if they have savings worth less than £23,250. Wherever you live in the UK though, the more money you have, the more you’ll be expected to pay.
Care at home that’s arranged by your local council usually isn’t free. For health and social care to be arranged, you’ll first need to get a care needs assessment.
After you’ve had this and agreed on a care plan, you’ll then have the financial assessment where the local council will work out how much you’re able to contribute towards care. Because the value of your home won’t be included in a means test when receiving home care, you’re more likely to receive financial support.
Once you’ve applied (more on this later), a Financial Assessment Officer from the local authority will get in touch and ask you about things like your:
Benefits (such as Attendance Allowance and Personal Independence Payment)
Properties (including any overseas properties)
The officer won’t need to know about the value of any other possessions or life insurance policies.
Your eligible income will then be assessed and you’ll be contacted as to how much support you’re eligible for.
Before applying for a financial assessment, you’ll need to have some information regarding your personal expenses, savings, income and investments at the ready.
The details you’ll need include:
Any savings in bank accounts, building societies, ISAs or premium bonds
Any shares or stocks you own
Any property or land you own
In addition, you should also make a list of any disability benefits that you receive (such as the disability living allowance or attendance allowance). This way, you’ll have everything conveniently available to hand when asked about it.
Financial assessments are free and take place after a care needs assessment or carer’s assessment.
To apply then, you’ll need to arrange a needs assessment and a carer’s assessment (depending on whether you’re the care seeker or caregiver - for example, if you care for someone with dementia).
You can contact your local council or find local authority adult social care services. In either case, all you’ll need to do is enter your postcode and then click on the relevant link to get contact information.
Alternatively, if you already have the relevant number for this service then you can instead call and get a booking made this way.
Here, we’ve explained what this form entails and what certain terms mean to make this process easier for you.
When completing a financial assessment form, ‘income’ refers to any money you regularly receive, such as a wage, benefits or a state pension. Meanwhile, ‘capital’ refers to any other assets you may have like savings and investments. In the case of residential care, capital may also include the value of your home.
Your capital and income will either be:
Fully included in the assessment
Partially taken into account
(For example, the value of your home may be completely disregarded in certain situations).
If you have a partner or spouse, the financial assessment form may also ask about their financial situation. Once it’s been determined what belongs to you and what belongs to your partner, the assessment should only take into account the finances of the person who requires care.
If you and your partner have a joint bank account (or other shared assets) then the assessment can only take into account the share belonging to you. Unless you can show otherwise, it’ll be assumed that your share of these joint assets is 50%.
Again, the income of yourself or your loved one will be assessed through a means test. A means test is when the local council looks at your income, savings and property, in order to work out how much you’ll need to contribute towards the cost of any care services and support.
Something to be aware of is that if you require care to stay in your own home then the means test won’t include the value of your property. However, if you need to permanently move into a care home then this test likely will include the value of your property.
The council will write to you as to how much your care will cost and the amount you’re required to pay.
If you qualify for any council help with care costs then you’ll be offered a personal budget.
You can choose to get this personal budget in two ways:
A direct payment into your bank account every month
The council organises your care and you’ll receive a regular bill to pay towards it
However, if you don’t qualify for any help with paying for care then you’ll be expected to pay the full cost.
The council will regularly reassess your finances, usually on a yearly basis.
If you have any questions as to how your financial assessment has been worked out or you think a mistake has been made then ask your council to explain it to you.
Local authorities must provide clear information regarding how much you’ll pay for care. This should state exactly what has been taken into account.
Almost everyone in the UK will have to pay something towards their care and support.
In England for example, you’ll have to pay all your care home fees if your capital is over £23,250.
If your capital is between £14,250 and £23,250 then you’ll have to contribute most of your weekly income towards your care costs. You’ll also pay an assumed extra income of £1 per week for every £250 of capital you have between these two amounts.
Currently, if the local council is paying towards your care then your only income that won’t go towards care will be a small Personal Expenses Allowance. Right now, this is £25.65 a week in England. Through the Savings Pension Credit disregard, you may also receive £5.90 a week if you’re single and £8.85 if you’re in a couple.
Just like a needs or carer’s assessment, getting a financial evaluation is completely free.
If you require a paid carer to visit your home then the value of your house won’t be included in the financial assessment. This is known as a property disregard. If you’re paying for a care home then the value of your house will be included, unless your spouse or partner is still living in it.
If you own a house, there’s a good chance you’ll have to pay your own care costs. This means that you may be required to sell your home to pay for care, depending on whether you’re able to afford this through your savings and any other types of income you may have.
If you permanently move into a care home and aren’t paying for your own care then the council can’t include your home’s value in your financial assessment for the first 12 weeks after you move in. This is to give you enough time to sell the property or arrange another option like a deferred payment agreement.
When using a deferred payment agreement, your local authority will secure a loan against your home and the money doesn’t have to be repaid until it’s been sold.
This 12-week period begins from the day you move into a care home. If you sell your property before the 12 weeks is up then this disregard will stop when the sale has gone through.
If you initially move into a care home on a temporary basis but this stay later becomes permanent then the 12 weeks will begin from the date that your care home stay became permanent.
Deprivation of assets is the act of intentionally giving your assets and/or savings away, in order to fall below the upper threshold for care costs, meaning you’ll no longer be obliged to fully pay for care and thus will avoid paying for it.
If your local authority believes that you’ve done this then they may still include these savings and assets in the means test. If this happens you’ll likely still be required to self-fund your care home place. In this case, you may be unable to get any type of financial assistance.
Put another way, you could be told that you don’t qualify for any support, despite no longer having enough money to pay for it.
Because you’ll likely be asked about things you used to own, trying to spend your money or give property away before the financial assessment takes place probably won’t work.
In certain cases, local authorities may choose to treat you as though you’ve had a full financial assessment, even if you haven’t. This usually happens when the local authority is confident that the costs of care or support will be met, based on the evidence they have. This is known as a light-touch financial assessment.
Here are the most common financial circumstances in which a local authority may consider carrying out a light-touch financial assessment:
If you have significant financial resources and don’t want to undergo a full financial assessment, but do want the local authority to arrange your care
Where the local authority charges a small or token amount for a certain service that you’re clearly able to afford
If you receive means-tested benefits that indicate you wouldn’t be able to contribute towards any care and support costs
You still have the right to request a full financial assessment if you wish. We’d recommend doing this if there’s any uncertainty surrounding charges.
For more information about care home fees and what support you may be entitled to, be sure to check out our handy resources below:
Searching for a care home can be a stressful and time-consuming operation. Thankfully, Lottie removes much of the difficulty from this process by connecting elderly people to the UK’s very best care homes through years of human expertise and smart technology.