When you or a relative needs to move into a full-time care home, the change in situation can be difficult enough without having to worry about cost. Care home fees can run into the hundreds of thousands, putting a huge amount of pressure on families under strain.
To help reduce this additional burden, Howells Solicitors has put together a 10-minute guide outlining the various ways to pay for care, as well as explaining instances where fees can be reclaimed and how to do this.
Who Pays Care Home Fees?
Usually, when a person requires residential accommodation, the Local Authority will assess their finances in order to determine how it should be paid for.
If a person has capital over £24,000 (Wales) and is not eligible for NHS funding they are considered ‘self-funding’, which means they have to pay the full cost of their care.
According to Gov.UK, capital is regarded as:
- Savings
- Any lump-sums or one-off payments received
- Investments (in businesses or personal pension schemes, for example)
- Property
- A beneficial interest in the capital of a trust
This is not a definitive list, the rules surrounding what capital is taken into account in a Local Authority assessment is extremely complex. For further information please see our additional care home guides, which go into more detail.
If a person has less than £24,000 in capital, their income is paid towards the cost of the care (minus a small allowance of £25.50 a week for their own spending) and the Local Authority will pay the remainder.
Income can be considered:
- Interest on savings
- Private/state pension
- Some benefits (pension credit, attendance allowance, part of Disability Living Allowance or Personal Independence Payment)
Before any Local Authority assessments take place, it’s important to ensure that the individual going into care is receiving all of the benefits they are entitled to.
Who is eligible to receive help from the NHS?
Medical care provided by the NHS is free at the point of need, whereas social care for older people is means-tested.
Eligibility for NHS funding is also assessed by the Local Authority, and there are 4 levels of care prescribed according to eligibility criteria.
Critical
A person’s need would be considered critical if they were unable to carry out most or all of their personal care, causing a major risk to their independence, for example.
Substantial
Substantial need would be considered is an individual had lost control over many aspects of their home environment.
Moderate
A person’s need would be thought moderate if they were unable to carry out some personal care, daily household chores, or manage their home environment.
Low
Those with low need would be unable to manage one or two aspects of their personal care and their daily chores are difficult to manage.
Again, this list is not exhaustive.
The NHS will contribute varying amounts towards the cost of residential care depending on an individual’s need. If a person is assessed as requiring NHS continuing care, then the full cost of care will be paid for by the NHS regardless of the capital they hold.
Whether a person is eligible for NHS funding is often the subject of debate. However, as a general rule, where the primary need for care is a health need, then fees should be paid by the NHS.
Often, families are unaware that the NHS should be paying for some, or all, of their care, which leads to considerable overpayment. In cases where families have overpaid, they may be due a full or partial refund. If you believe you, or a member of your family have been incorrectly assessed or charged, get in touch for legal assistance.
Also, if you or your relative is due to go into care, remember you don’t have to rely on the NHS to accurately assess your case. Howells Solicitors can provide advice on completing assessment forms and preparing medical paperwork, and can accompany you to review meetings to ensure a better chance of success.
Protecting Your Assets
There are several methods of protecting your assets from the cost of care home fees. Of these, gifting the family home and setting up a family trust are the most popular. However, there is no fool-proof way of avoiding the value of your home being taken into account by means testing due to the anti-avoidance measures.
If a Local Authority believes that an asset has been given away with the intention of creating or increasing entitlement to means tested benefits, it may decide that the donor has notional capital of equivalent value to that of the asset given away.
At Howells Solicitors, we do not usually recommend that clients make an outright gift of their family home, even to their children. However, we acknowledge that every case is different, so please do call us on 0808 178 2773 if you are considering this option.
Help With Care Home Fees
Understanding and paying for care home fees can be extremely confusing for all involved, but at Howells Solicitors we specialise in making everything as simple and as clear as possible.
We offer a comprehensive service to elderly clients planning for retirement, including care home fees advice, tax planning and releasing money from your home. Find out more about how Howells can help you understand care home fees here.
