The responsibility for funding care costs is often a battle between the Local Authority and NHS, as each fights to protect its budget and keep costs down. It can be difficult for families to navigate the rules underpinning funding responsibilities, particularly when neither the Local Authority nor the NHS is transparent about the facts.
Critical: you need to understand the difference between social care and healthcare
Simply put, social care is provided by the Local Authority and is means-tested – ie you may have to contribute to the cost of care; healthcare/nursing care is provided by the NHS, is not means-tested, and is free for all at the point of use (ie when you need it).
It’s vital to remember that:
- It is unlawful for the Local Authority to do any kind of means-testing or financial assessment before it has been properly established that the individual does not require care from the NHS; and
- Your relative should not be asked to pay any care fees until an NHS Continuing Healthcare assessment has been done.
If the NHS has completed a Continuing Healthcare assessment and found that an individual does qualify for NHS Continuing Healthcare Funding (CHC), then the all the cost of care, accommodation and their social needs, should be paid in full by the NHS. That can save families, on average, at least £35,000 per annum in care home fees! In some more expensive care homes weekly fees are £1,500 a week, which represents a massive saving of £78,000 per year, if your relative qualifies for CHC.
Caution: Healthcare needs can change. Just because an individual is in receipt of NHS Continuing Healthcare Funding does not necessarily mean that this free funded care will continue indefinitely. Regular assessments ought to be carried out by the NHS, and funding can be withdrawn if an individual’s healthcare needs no longer meet the eligibility criteria for free funded CHC. Read our blog: Are you worried that Continuing Healthcare Funding may be withdrawn? If you are worried that CHC might be withdrawn, get help and visit our one-to-one page.
But, if the NHS Continuing Healthcare assessment has concluded that an individual does not qualify for NHS funding, then that person may be asked to contribute towards the cost of their care. The amount an individual is expected to pay is determined by the value of their capital and/or assets.
Thresholds for contribution fall into the following three categories:
- If the value of your assets, including property, amounts to more than £23,250, you will be expected to fund the cost of all your care in full (self-funding). You are not obliged to undergo any means-testing by the Local Authority, and can simply state you are self-funding.
- If the value of your assets, including property, is between £14,250 and £23,250, you will be expected to contribute towards the cost of your care under the Tariff Rules. At the moment, this is calculated at £1 per week for every £250 of capital you own, and part thereof, between £14,250 and £23,250.
- If the value of your assets, including property, falls below £14,250, the Local Authority will fund the cost of your care up to the approved rate; you will be expected to contribute only from your income (e.g. pension). If your fees exceed the approved rate, you will be asked to pay a “top-up” to bridge the gap, or find a cheaper placement.
Don’t Forget: If your assets are below £14,250, the Income Protection Principle dictates that your weekly income should not fall below the Minimum Income Guarantee, or MIG. In 2019 the MIG is £189 per week for a single person who qualifies for pension credit. For couples, if one or both of you has reached Pension Credit qualifying age, your individual MIG is £144.30 per week. For further reading on the subject look at:
Important: the Local Authority cannot take into account the value of your property and assets during the first twelve weeks of care. This is called the “Property Disregard“. If you have been paying for your care and there has not been any involvement by the Local Authority, the Property Disregard starts from the point at which assistance is requested, NOT from the date of admission to care. So, if you were self-funding for three years before the value of your assets fell below the upper threshold (£23,250), the twelve week Property Disregard should be applied from the point at which the Local Authority does its first assessment of your financial situation. You should not pay care fees during these twelve weeks.
Do I have to sell my property to pay for care?
No, you cannot be forced to sell your home.
Thousands of families have reportedly sold their homes to pay for care, when they didn’t need to!
This is a common trap, so don’t make the same mistake.
The first question when looking at going into a care home is not what private assets or funds you have available to pay for the care home fees. The starting point should always be whether your relative has a ‘primary health need’ which would entitle them to an assessment for NHS Continuing healthcare funding (CHC) – ie FREE funded care paid for in full by the NHS. So, if you are being asked about funding care home fees from the outset ie about your relative’s ‘wealth not health’, then you need to change the conversation around to discussing their ‘health not wealth!’
As above, if your relative does not qualify for CHC and has assets (including property) valued in excess of the current threshold of £23,250 – then, unless they have other private means available (eg savings, other assets, income, pension or an investment policy etc.), they may have to sell their property to meet the costs of the care home charges.
If the value of your relative’s assets fall between £23,250 and £14,250, and they have to contribute to their care home fees, then selling their property is often the only way people can afford to meet their payment obligations to the Local Authority, if they have no other means available.
However, the Local Authority cannot force you to sell your property (or take its value into consideration for means-testing) if your relative’s partner (or former partner) still lives there, or a dependent under 16, or relative over 60, or someone incapacitated lives there, or someone else owns the property eg a spouse or trust.
Our tip: Negotiate! If your relative is struggling to pay the Local Authority’s charges for care, and they don’t want to sell their property for whatever personal or financial reason, ask the Local Authority about their Deferred Payment Arrangement scheme (DPA). Essentially, under a DPA, the Local Authority will agree to continue paying the care fees for the time being, but will defer (ie delay) repayment of their fees until the property has been eventually sold at a future date. The care fees will then be recouped by the Local Authority out of the sale proceeds once sold, or from the individual’s estate after death. However, before entering into a DPA, we would recommend taking independent financial advice, as such an arrangement may have adverse tax implications.
For further reading around the subject: