Paying for Home Care
Funding Information For Home Care
Funding your care can seem a daunting task, but there are plenty of options available to you. These are dependent on your financial situation which is evaluated by your local council.
Firstly, the council will identify the extent of the care required, to enable you or your loved one to live as independently as possible. If they find that you require care either in your home or in a residential setting, the council carry out a “means test” which is a financial assessment of your ability to fund the care.
In this evaluation, your benefits, earnings, savings and assets are analysed. If you’re eligible for it, the council could pay for some, if not most of your care. The table below shows how you will be paying the care home fees depending on your capital, 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|
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.
Will I have to sell my home to pay for my care?
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 your home 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 fees.
Can I avoid selling my property to pay for care by giving it away?
Some people consider giving away or selling their property for cheap to their children, relatives or close friends to avoid having it included in the means test and pay less of their care fees.
Doing so counts as deliberate deprivation of assets, which is when you deliberately give your assets and capital away as gifts or sell for cheap to pay fewer 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 owned them.
Deferred Payments are an alternative way of funding for your 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.
What are the options to pay for the resident care fees?
The first steps towards funding for your care fees is to ensure that you are receiving all the benefits you’re entitled to.
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 is typically for a short period of time but can be used on a permanent basis as well.
Immediate Needs Annuity
Another method of funding your care is by having an immediate needs annuity which is a type of insurance policy where a regular income is guaranteed to meet the cost of your care.
A regular tax-free payment is made to your registered care home 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.
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 by 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 our 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. If you would like some more advice on the funding options, feel free to contact us.
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