Care Fees Funding

Paying for Care at Home and Care Home Funding

Care fees funding is a crucial aspect to consider when planning long-term care, whether for yourself or a loved one. Various sources can contribute to the payment of care fees, including individuals, local authorities, health authorities, and family members. The decision on how to fund care depends on several factors, such as your specific care needs, financial resources, and the type of care home you go into.

For those receiving care in their own homes or care homes, it’s essential to understand the different payment options available and plan accordingly. Here are some key aspects to consider when exploring care fees funding:

• What type of care is needed:

The level of care required will directly influence the costs involved, which include personal care, nursing care, or a combination of both. Depending on the services provided, different care providers and settings might have varying fee structures.

• What are the financial means:

Assessing your financial resources, savings, and assets is essential to determine how much you can contribute towards care fees. Your eligibility for public funding and benefits will depend on your financial situation.

• Self-funding:

Once your care needs have been determined, how that care will be paid for needs to be ascertained. There will be a financial assessment to examine your income (private and state) and your capital. Apart from around £25 per week, all your income will be used to pay for your care. The amount you are left with is your personal expenses allowance. If the value of your capital assets is over a certain threshold (£23,250 since April 2010), then you will be fully self-funding, and you will have to pay all of your care costs. If that is the case, you will be entitled to claim Attendance Allowance to boost your income, which might be paid at different rates depending on your care needs. Certain capital assets are disregarded in the means test, including jointly owned property, certain insurance-based investments and assets within trusts (among others). If you are self-funding, your contract for the care services you receive will be directly between you and the care home.

• Local authority funding:

If the value of your capital assets is below the threshold mentioned above, you will be entitled to receive a contribution towards your care fees from the local authority. There is a lower threshold (£14,250 since April 2010) and if the value of your capital assets is above this, then every £250 worth of capital above this threshold will not count as capital but will count as an extra £1 per week income. The local authority will have a capped rate of contribution and so will only pay up to a certain amount per week. This amount includes your own contribution from income. If this capped amount is not enough to pay the full amount of the fees, then you may need to rely on the third-party top-up described below. If you enter care temporarily, then the value of your property cannot be included in the assessment of your capital. The same applies to the first 12 weeks of your permanent stay in care. Therefore, you may receive local authority assistance for an initial period and then become self-funding. If you are self-funding but do not have the money available to pay, for example, if it is tied up in the value of a property which has not sold, then it is possible to sign up to the local authority Deferred Loan Scheme. This is a scheme whereby the local authority will lend you the money to pay the care fees. It will attract interest and will be secured by a charge over your property. It should be paid back when the property is sold, and the money released. Finally, if the local authority contributes to the payment of your care fees, then you will lose your entitlement to Attendance Allowance and your income will be reduced accordingly.

• Third-party top-up:

Where the cost of care in a particular home is more than the amount being paid by you from your income plus the local authority contribution, taking it up to the capped rate, your choice is either not to stay in that home (if there is an alternative) or to stay there and rely on a third-party top-up. Apart from in certain specific circumstances, you are not allowed to pay your own top-up, so a family member will be asked by the local authority to sign an agreement which makes them liable to pay the extra fees.

Family members are not obliged to pay the top-up. Still, likewise, if alternative suitable care homes are available, the local authority is not obliged to place you in the more expensive one. It sometimes happens that as a person’s assets decrease through the payment of care fees, they go below the threshold, and the local authority starts contributing. The level of fees might be higher than the total capped rate, and there may be no-one able or willing to pay the top-up. In these circumstances, the resident may have to move home unless the home itself agrees to receive a lower fee or there is no other suitable home which can meet the resident’s needs.

• Health authority funding:

In some cases, the health authority may cover the cost of care if it’s deemed to be primarily healthcare-related. This would typically apply to individuals with complex medical needs. An assessment by a healthcare professional would be necessary to determine eligibility for this type of funding.

In summary, payment of care fees requires careful consideration of various factors, including the type of care needed, financial means, and available funding sources. With proper planning and consultation, the right combination of payment options can be identified to ensure that long-term care is adequately funded and sustainable.

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