Paying for home care
Funding for home care
There are a few different options to consider when choosing a quality home care provider, but help is out there and funding for home care is available. If you are unable to self-fund your care, you may be qualified for assistance from your local council, the NHS or other means.
Local authority funding for care: how it works
There is local authority funding for care in your own home available, but how much they may offer you is up to the local council themselves. Firstly, you’ll need to determine who your local council is, and let them know of your situation. The council will identify the extent of the care required, to enable you or your loved one to live as independently as possible. This is called a ‘needs assessment’ and is free to anyone who would like one.
If the council find that you require care either in your home or in a residential setting, they will then carry out a “means test”. This is a financial assessment of your ability to fund the care.
If you’re eligible for it, the council could pay for some, if not most, of your care. The council will then decide whether they will pay for the full cost of your care, they will pay for some and you will pay the rest, or you will pay for all of your care yourself. The table below shows how much you will put towards the care home fees depending on your capital (savings and assets), which is calculated using the means test:
|Your Capital||How Much You Will Pay|
|Over £23,250||You pay the full fees|
|Between £14,250 and £23,250||The council will fund a portion of your care and you will pay for the rest of it|
|Below £14,250||The council will pay for all of your care fees or for most of it|
The means test is also free, so there is no cost involved in finding out if you’ll be paying for home care, or if your council will.
Have a question about paying for home care? Contact us to see how we can help you.
What are the factors involved in the means test?
The means test looks at your income, benefits, entitlements, savings and other assets (such as property) to calculate your capital. You must ensure that you are getting all of your benefits and entitlements as the means test will assume that you are receiving them.
However, certain types of income and capital will not be counted in the means test, such as money from certain disability benefits.
Paying for home care if the council have agreed funding
If the council are happy to pay for your care, you’ll receive what’s known as a ‘personal budget’. The exact amount will be worked out by the council when they make care plans with you. You can choose to receive your personal budget in three ways:
- A monthly direct payment into your bank account (the council will ask for receipts to verify you’re spending the money on your care)
- The council will arrange and pay for the care for you (you won’t need to send receipts or arrange anything at all)
- A mixed personal budget where the council arranges some of your care, but you organise and pay for the rest from your personal budget
If the council are arranging your care, it’s important to know that you still have the right to decide how your budget is spent. If you’re unhappy with the type of help that the council suggests, you are able to research services and ask them to change it if possible.
Funding for home care: what you can get for free
Your council must provide some things if you’ve been assessed as needing them. It doesn’t matter how much you have or earn, they must provide:
- Small pieces of equipment or adaptations to the home which each cost less than £1,000
- Care after you’ve been discharged from a hospital
This is particularly important if you plan to receive care from your home, instead of residential care. These adaptations are helpful to make care easier at home, so make sure you question your local council about them.
Will I have to sell my home to pay for home care fees?
If you wish to remain in your home, the means test won’t include the value of your property. However, if you need to permanently move into a care home, the test may include the value of your property.
The value of your property is calculated by looking at its present value minus any mortgage or loans you have on it, as well as 10% of its value to account for selling costs. In some situations, your home won’t be taken into account in the means test, even if you are looking to move into a care home permanently. Your home won’t be taken into account if it is occupied by:
- Your partner or former partner, unless they are estranged from you
- Your estranged or divorced partner, IF they are also a lone parent
- A relative who is aged 60 or over
- A child of yours aged under 18
If your property is included in the permanent care home means test, the council must not take it into account for the first 12 weeks of your care. This will give you space and time to consider if this is the right option for you and to decide what you want to do with your properties and home care fees.
Can I avoid selling my property to pay for care by giving it away?
Some people consider giving away or selling their property at a lower cost to their children, relatives or close friends to avoid having it included in the means test, and therefore pay less of the care fees.
Doing so counts as deliberate deprivation of assets, which is when you consciously give your assets and capital away as gifts or sell for cheap to pay less in home care fees. The council assesses your transactions and your financial history and, if they find that you have been doing this, these assets are still counted as if you own them.
A deferred payment is an alternative way of funding for home care without selling your home. This system allows you to defer paying for the care until a later date.
This could be until after your death or it could be a temporary arrangement to give you time to sell your property. When you pass away, the costs will be paid from your property. If you are eligible, your council must offer you this option.
How to pay for home care
The first steps towards funding for your care fees is to ensure that you are receiving all the benefits you’re entitled to. There are many benefit calculators available online to make sure you know what you’re eligible for.
NHS Continuing Healthcare
Another factor to consider is if you require medical attention, as you may be eligible for NHS continuing healthcare. This is a fully funded package provided by the NHS to continue your care at your home. This package is for adults, children and young people who have additional needs from a disability, accident or illness that aren’t met by existing services. To receive this package, you’ll first need to be assessed by a team of healthcare professionals, who will look over all of your care needs. If eligible, this package is typically put in place for a short period of time but can be used on a permanent basis as well. If your needs change, so will the care in place.
Immediate Needs Annuity
Another method of funding your care is through an immediate needs annuity, which is a type of insurance policy where a regular income is guaranteed (in exchange for an upfront lump sum) to meet the cost of your care. Also known as an immediate care plan, or an immediate need care-fee payment plan, an immediate needs annuity is a viable option for paying for home care for many people.
A regular tax-free payment is made to your registered care provider for the rest of your life, and all that is required is a one-off sum payment to purchase the plan. The cost of this payment is dependent on the monthly payment that you require, your gender, age and health as well as your medical history.
Other ways to self-fund home care
- Savings, investments and other assets –selling assets including shares could release money to help pay for care services
- Downsizing property – moving to a smaller space saves on running costs and also may provide a lump sum to fund home care
- Income from employment, property (such as lettings) or pensions
It’s important to note that you might not always have to self-fund your care. Once the value of your total assets drops below the threshold, you may be eligible for assistance from your local council.
Tax exemptions to consider when paying for home care
You may be eligible for council tax discounts or exemptions, depending on your situation. This could help with paying for home care now or in the future, by giving you savings from tax payments. You are exempt from paying council tax:
- If you live alone and your house becomes unoccupied because you move into a care or nursing home
- If you are diagnosed with a severe cognitive impairment which appears to be permanent (Dementia is a condition under which this would apply)
You may be eligible for a reduction in council tax:
- If you live in a larger property than you need because you, or another occupant, are disabled
If you feel you may be eligible for a discount or exemption from council tax, it’s worth getting in contact with your council. They will be able to carry out an assessment and verify this for you.
Self-funding for home care or residential care
If you are moving to a care home on a permanent basis, and the council has accumulated your assets to be above £23,250, then you will have to fund for your care yourself. The local council will calculate the cost of your care and how much of this you will have to pay for yourself.
They will provide a realistic figure which allows you access to an appropriate care home. You will be expected to pay for this from your eligible income, but you must be left with a minimum of £24.90 per week, which is known as your personal expense allowance.
The care home fees will vary depending on the individual care home and its location. The difference between a care home in the north and the south can be as much as £230 a week.
Find out more about the cost of care with Abbots Care. If you would like some more advice about paying for home care, feel free to contact us.
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17 September 2021
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