When it comes to choosing a care home, understanding the funding options available is crucial. In this blog we will outline the different ways that a stay in a care home can be paid for.. We’ll explain what support you may be entitled to, and where to find trusted and impartial advice. Having all the facts will help you make the best decision for you or your loved one.
How does care home funding work?
Before you move into a care home, you should ask your Adult Social Care Department to carry out an assessment of your care needs. Once it’s agreed that you need to move into a care home, the social worker will assess your finances through a ‘means test’ and work out who is going to pay for it.
They will ask you to declare your savings, assets and income. If you hold any savings and assets in joint names with your spouse, only 50% of these have to be declared. Your property will not be included in the means test if your spouse is going to remain living there or a relative over the age of 60 lives there.
If you have a property that is not going to be disregarded from the means test (because no spouse or relative over 60 lives there) you may not have to sell it straight away and we’ll go into the alternatives later on in this blog.
For a closer look at the means test assessment, read our guide on ‘Everything You Need to Know About Means Testing for Residential Care’.
What care home funding options are available?
Local Authority Care Home Funding
The means test will determine how much assessable savings and capital you have. If you have below £23,250 (in England and Northern Ireland) then you should qualify for funding from the Local Authority.
The amount that they will pay for you may be limited, but they must always offer you at least one care home place that meets your assessed care needs and which they will pay for in full i.e. a place where no third-party top-up is required. You will, however, be expected to contribute almost all of your income towards what they pay for you. They will let you keep a small ‘personal expenses’ allowance and if you have a spouse, you can pay them 50% of any private pension that you have.
| Savings & Capital | How Much Will You Have to Pay? |
| Over £23,250 | You’ll usually be responsible for paying the full cost of your care until your capital drops to this threshold. |
| £14,250 and £23,250 | Your local authority should pay for your care, but you will be expected to contribute most of your income and still pay from your savings at a rate of £1 for every £250 that you have between these two thresholds. This is called ‘tariff income’. |
| Below £14,250 | Your local authority should still pay for your care, and you will continue to contribute most of your income, but you will no longer have to pay the ‘tariff income’ |
Local Authority Funding with a Top-Up
If you don’t like the care home place that the Local Authority offers you, you can ask them to pay the ‘cash equivalent’ to a care home of your choice, but if that is more expensive, the care home may ask for a top-up for the difference, and this has to be paid by a third party, such as a family member or a charity.
The local authority will usually collect this amount directly from whoever has agreed to pay it. Before agreeing to a top-up arrangement, and since circumstances can change, it’s important to consider:
- how sustainable this option is in the long term
- what might happen should the agreed third party no longer be able to make the payments
Self-Funding
If you do not qualify for Local Authority funding, you will be classed as a self-funder and will have to cover the full cost of the care home fees yourself.
Self-funding provides the most flexibility and choice as you won’t need to rely on a third-party to top-up the Local Authority funding in the event that the care home of your choice is more expensive. When choosing a care home as a self-funder, you need to think about how long your funds will last and what would happen if they were to run out. Many families find it helpful to speak to an independent financial adviser who specialises in later-life care, as they can do some cashflow forecasting for you and also look at possible solutions to prevent the money running out, such as a Care Fees Annuity (sometimes also called an Immediate Needs Annuity).
Options if you own a Property
If you own a property which is not going to be disregarded as part of your means test, the Local Authority has to ignore its value for the first 12 weeks of a permanent move into a care home. If your other assets are worth less than the capital threshold, they will pay for your care for those 12 weeks (although the normal rules about the funding being limited and having to contribute your income will apply). At the end of the 12 weeks, you should have the option to enter into a Deferred Payment Scheme with your Local Authority. This scheme allows you to borrow money to pay for your care, repaying the loan when the property is sold. You might use this scheme for the short-term, if you are worried it will take a long time to sell or it, or for the longer-term if you wanted to rent it out.
Remember that if the property is still occupied by a partner or family member over the age of 60, the property is disregarded and so the Local Authority should be providing the funding – not lending you money to pay for it yourself.
There will be setting up costs and interest is usually charged on the deferred amount, and there will be a repayment process once the agreement ends. It’s worth getting advice about this option so that you understand the full terms and fees involved. If you are worried about cashflow, just for the short-term, there may be alternatives such as speaking to the care home about a short grace period for paying fees.
NHS Continuing Healthcare
This option is available for people with significant, ongoing health needs, living in a care home that’s registered to provide nursing care (not just personal and social care). Where granted, it covers the full cost of care, including accommodation. Eligibility for NHS Continuing Healthcare is determined by healthcare needs rather than your capital, and it’s assessed separately from the Local Authority means test.
If you think you or your loved one may be entitled to either of these, it’s worth raising this with your GP, social worker, or Local Authority as part of your wider care planning. You may not qualify for NHS Continuing Healthcare at the start of your care journey but it’s worth knowing about for the future.
If you just need a small amount of nursing care, the NHS should pay a weekly contribution towards this. It’s paid directly to the care home and is called Funded Nursing Care.
What help is available with care home self funding?
Yes, as a self-funder, you can claim Attendance Allowance. This is a non-means-tested benefit, meaning it is not affected by your savings. You may be eligible for Attendance Allowance if you are over State Pension age and need help with personal care due to an illness or disability. The payment is tax-free and is payable at a lower or higher rate, depending whether you need help during the day time only or at night time as well.
Impartial Support and Guidance
We know that when it comes to navigating care funding options, there is a lot to consider. That’s why we have partnered with trusted affiliates, Eldercare Group.
They will help you work out who should be paying for your care and if you are going to be a self-funder, they will help you with the cashflow forecasting we mentioned earlier. They will explain the funding options that you have, including whether a Care Fees Annuity is likely to be affordable and work for you. The Eldercare Group website provides helpful information about care home funding, and has a helpful Care Fees Annuity Calculator so you can get an idea of cost. They also have an impartial helpline which can be accessed by calling 0800 082 1155.
At Eldercare Group, we think families should seek advice when considering care home funding. “Firstly, we can make a very overwhelming situation much more manageable. We will break things down, step at a time, and help you work out what your options and choices are. If you haven’t encountered the care funding system before, you simply won’t know what you don’t know! Taking professional, independent, specialist funding advice as soon as you start looking for a care home helps ensure you understand your options, ask the right questions, and find out what you need to know early in the process.
Contact Us About Care Home Funding Options
At B&M Care, we understand that navigating care home fees and funding options can be overwhelming.
Our commitment to providing exceptional care extends to helping you navigate care home funding options. Let our dedicated team help you through the process and explore the options available. Contact us today – we’re here to support you every step of the way.
FAQs
NHS Continuing Healthcare
Once someone is admitted to a B&M Care home, they will pay a deposit of four weeks’ worth of fees in advance. In subsequent months, fees are paid one month ahead on the first of each month. Find out more about paying for care at B&M Care.
Yes, B&M Care offers different funding options to make care accessible to a range of individuals. We accept those who are both fully self-funded and those who qualify for Local Authority funding, but we will usually require a third-party to top up that funding unless you have been resident with us for a while already as a self-funder.
There is no requirement to sell your home to cover the cost of our care if you have other means to pay for it (such as savings or accessing a Deferred Payment Scheme). Many residents do, however, choose to sell their home as this releases capital which, in turn, gives them options such as buying a Care Fees Annuity.
Alongside your care needs assessment, we will also carry out an individual financial assessment before admission. This helps us understand how your care is likely to be funded over the longer term, and how long you are able to fund your care privately. When it appears that your capital is falling towards the current local authority upper capital limit of £23,350 in England, we will discuss this with you well in advance and signpost you to your local authority for a financial assessment. They will assess both your financial circumstances and your eligible care needs to determine whether you qualify for funding and, if so, how much they may contribute towards your care.