Care home funding; who pays if your parent or elderly relative needs to go into a care home?

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The rules on who pays for care if your parent or other relative needs to go into a nursing or residential home aren’t exactly straightforward.  But it’s worth understanding what the rules say on care home funding; who pays if your parent or elderly relative needs to go into a care home?

Getting an assessment of your needs

If your parent or elderly relative needs to go into care, it’s important that they get an assessment of their care needs. If they are assessed as needing care, they will also be given an assessment of their finances (namely, their ability to pay). This will determine who pays for their care.

Who pays if your parent or elderly relative needs to go into a care home?

If an elderly person needs to go into a home, they, the local authority or the NHS might pay for their care, depending on the value of any savings, investments and property (in some cases) that they have and the type of care they need.

There are two types of care home and who pays for care will, to some extent, depend on the type of home the elderly person needs care in. This article will deal with care in a residential home.

SAVVY TIP: If your relative needs care in a nursing home, they should get some or all of their nursing care paid for, depending on the illness they have and how severe it is.

Care in a residential home:
The local authority social services department will carry out a financial assessment to find out how much capital and/or savings the person needing care has.

  • If they have less than the savings threshold. The savings threshold varies according to whereabouts in the UK the person lives. If they have savings below a certain limit, the local authority will ignore the value of their savings when working out who should pay. Any state or workplace pension income you have will be taken into account.
  • The means test thresholds vary around the UK.  If the person who needs care has savings/assets below £14,250 if they live in England or Northern Ireland, £30,000 if they live in Wales or £16,500 if they live in Scotland, they will not have to pay towards care in a residential home from those savings or assets. All figures are for 2017 -18.

SAVVY TIP: If the person needing care has less than the lower savings limit, it doesn’t mean that care will be paid for by the local authority. State or private pension payments and most benefits will be assessed. The only guarantee is that the person in care will be left with £24.90 a week if they are in England or Northern Ireland. This figure is £26.50 if they live in Wales and £25.80 if they live in Scotland. This is money they can spend as they choose, and it’s called the ‘personal expenses allowance’.

  • If they have savings or capital worth more than the ‘upper savings limit’. This is £23,250 in England and Northern Ireland, £30,000 in Wales (the upper and lower thresholds are the same in Wales) and £26,500 in Scotland. In this case they will not get any financial help towards the cost of their care from the local authority. These are the 2017 – 18 figures. In Scotland, although the person has to pay 100% of the costs, they don’t include personal care.

SAVVY TIP: Where the local authority pays, a wife or husband of the person who needs care may be asked to make a contribution towards the cost of care. This is called a third party top up. However, the local authority doesn’t have the right to delve into their finances. If your relative needs care and family members are being asked to make a financial contribution by the local authority, get advice from a specialist solicitor (such as a member of Solicitors for the Elderly or from a charity such as Age UK.

How your capital is assessed

If the person needing care in a residential home has some savings and capital, but not enough that they have to pay the full cost of care themselves, there are rules about how these are taken into account.

  • Savings and investments: If the person has money in a bank account or in investments, it will be assessed as providing £1 a week in income for every £250 they have. That means it assumes that if they have £1,000, they will be assessed as receiving an income of £208 a year. In this example, they’d have to pay £4 a week towards their care costs.
  • Property: The value of property may be included in the assessment, but there are some times when the value of your property is ignored. If, for example, one of your parents needed to go into care, the value of the home wouldn’t be taken into account if the husband, wife, civil partner or partner lived with them or if they shared the property with a close relative aged below 16 or above 60, or under the age of 60 if they were disabled.

SAVVY TIP: The value of someone’s home is ignored for the first twelve weeks after someone moves into a care home. After that, it counts as ‘capital’ if the exclusions mentioned above don’t apply.

Related articles:

Is your money at risk if a care home goes bust?

Can you give away your home to avoid paying care fees?

Your rights if your relative needs to go into a home

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