At Onions & Davies, we receive a number of enquiries from people who are confused by the myriad of ways in which care costs can be funded.
Payment of your care fees, whether you are receiving that care in your own home, or in a care home, can be made either by you, your local authority, your health authority, members of your family or any combination of those.
How this is decided depends upon the type of care you need, your financial means and the type of home you go into. This Guide aims to give you some basic information regarding these different forms of funding.
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Once your care needs have been determined, it needs to be ascertained as to how that care is to be paid for.
There will be a financial assessment to look at your income (private and state) and your capital. All of your income apart from just over £20 per week will be used to pay for your care. The amount you are left with is your personal expenses allowance.
If the value of your capital assets is over a certain threshold (£23,250 since April 2010), then you will be fully self-funding and all of your care costs will have to be paid by you.
If that is the case, then you will be entitled to claim Attendance Allowance to boost your income and this might be paid at different rates depending on your care needs.
Certain capital assets are disregarded in the means test and these may include jointly owned property, certain insurance based investments and assets within trusts (among others).
If you are self-funding, your contract for the care services you receive will be directly between you and the care home.
If the value of your capital assets is below the threshold mentioned above, you will be entitled to receive a contribution towards your care fees from the local authority.
There is a lower threshold (£14,250 since April 2010) and if the value of your capital assets is above this, then every £250 worth of capital above this threshold will not count as capital but will count as an extra £1 per week income.
The local authority will have a capped rate of contribution and so will only pay up to a certain amount per week. This amount includes your own contribution from income. If this capped amount is not enough to pay the full amount of the fees, then you may need to rely on the third party top up described below.
If you enter care on a temporary basis, then the value of your property cannot be included in the assessment of your capital. The same applies to the first 12 weeks of your permanent stay in care. It may be, therefore, that you receive local authority assistance for an initial period and then become self-funding.
If you are self-funding but do not have the money available to pay, for example if it is tied up in the value of a property which has not sold, then it is possible to sign up to the local authority Deferred Loan Scheme. This is a scheme whereby the local authority will lend you the money to pay the care fees. It is an interest free loan and will be secured by a charge over your property. It should be paid back when the property is sold and the money released.
Finally, if the local authority contribute to the payment of your care fees, then you will lose your entitlement to Attendance Allowance and your income will be reduced accordingly.
Where the cost of care in a particular home is more than the amount being paid by you from your income plus the local authority contribution, taking it up to the capped rate, your choice is either not to stay in that home (if there is an alternative) or to stay there and rely on a third party top up.
Apart from in certain specific circumstances, you are not allowed to pay your own top up and so a family member will be asked by the local authority to sign an agreement which makes them liable to pay the extra amount of fees.
Family members are not obliged to pay the top up but, likewise, if there are alternative suitable care homes available, the local authority are not obliged to place you in the more expensive one.
It sometimes happens that as a person’s assets decrease through the payment of care fees, they go below the threshold and the local authority start contributing. The level of fees might be higher than the total capped rate and there may be no-one able or willing to pay the top up. In these circumstances it is possible that the resident will have to move home unless the home itself agrees to receive a lower fee or there is no other suitable home which can meet the resident’s needs.
Funding from the Health Authority can come in one of two ways.
If you need part medical care and part social care, then the NHS will pay a flat rate towards the medical care. This used to be called Registered Nursing Care Contribution and was at three different rates until April 2010. It is paid to the care home directly.
If your primary care need is a health need, then you should be eligible for Continuing Healthcare Funding. This means that all your care fees should be met by the NHS regardless of where you are receiving that care.
Prior to discharge from hospital, you should receive an assessment at which you, your family and even your solicitor can be present if you so wish.
The assessment is a two-stage process, beginning with an initial screening and followed by a more involved assessment with something called a Decision Support Tool.
The Decision Support Tool looks at 12 areas of care and involves a detailed report looking at the nature, intensity, complexity and unpredictability of your care needs. An assessor then uses the report to determine whether or not you qualify for Continuing Healthcare Funding.
For urgent situations there is a fast track pathway to allow an immediate decision to be made and this will be followed later on by a full assessment.
Sometimes it is appropriate for a joint package of care to be put in place, with funding from the local and the health authorities.
Finally, if you go into care having been sectioned under the Mental Health Act, then all your care fees will be paid for you under section 117 of that Act.
It is possible to challenge the decisions that are made regarding how your care is to be funded. These challenges can be made through local authority and health authority complaints procedures, review panels and even to the appropriate Ombudsmen.
It is also worth remembering that your care needs will change over time, sometimes, with the right care, becoming better and sometimes becoming worse. It is always possible for you or your family to request a reassessment from time to time.
It is highly advisable to plan in advance for the possibility of going into care. There will be ways in which you can arrange your finances beforehand, protect certain assets and put documents in place that will make the whole process so much easier to deal with.
At Onions & Davies, we are experienced in helping clients plan, sometimes many years in advance, advising them at the point of going into care and also representing them if they wish to challenge the assessment process. We are members of Solicitors For the Elderly, a national organisation of lawyers who specialise in and are experienced in this type of law.
With the law in this area being very complicated and care costs averaging between £30,000 and £40,000 per year, it is essential to be properly advised and prepared.
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This information refers to the law of England & Wales only, which from time to time changes. In particular, tax information changes annually. It is not a substitute for professional advice, which is up to date and specific to your needs. This information is a summary of the provisions relating to care fees funding and cannot cover every aspect of their operation. It represents our understanding of current legislation in England and Wales but should not be relied upon as an authoritative statement of law nor as constituting advice. We would advise that legal advice be sought in every circumstance.