Paying For Care

Care Home Fees and Paying for Care

The cost of living in a care home varies greatly according to type of care home, your care needs, geographical area and so on. It has been estimated that living in an average care home costs around £36,000 each year, although the figure is thought to be closer to £50,000 per year for a care home in the south.

So if it has reached the point where you or your relative needs that additional level of care and support, what are your options for paying for the care?

Paying for Care

Step One – Get a Care Needs Assessment - This assessment is organised through the local council or social services and will help determine which level of care you are likely to need. You are entitled to a care needs assessment even if you are planning to fund your own care.

Step Two – Get a Financial Assessment - If your care needs assessment recommends that you qualify for a residential care home or nursing home, social services will give you a financial assessment to determine how much of the fees for the care home will be funded by the local council. They will take into account your income as well as any capital – this may include the value of your home.

Step Three – Consider your options

• Care funded by the local authority:
In England, the local authority will currently contribute towards your care if you have assets (including your home) of less than £23,250. Your home will not be regarded as an asset if it is occupied by a spouse or partner, a close relative under 16 or over 60 or a relative under 60 who is disabled. The local authority has a duty to provide you with a place which can provide the level of care identified by your care needs assessment, which means that you may not have a choice as to which care home you move into. Sometimes, you are able to choose a more expensive home as long as family members are able to pay the shortfall. This is called a top-up payment.

• Self funding then moving to local authority funding:If you are able to pay for your care for a short while but may well need help with funding later, it is advisable to talk to your local authority before a decision about care is made. Your local authority can only fund future care if it has assessed that you need a care home and if you are resident in an authority approved home.

• Paying for your own care:
If you need to pay for your own long-term care, the fees charged will cover all your living costs including food, electricity, council tax etc, as well as your care needs. However, you should apply to your local authority for an Attendance Allowance which is a tax free weekly payment towards your care. If your care assessment stated that you require nursing care, the ‘nursing care’ part of the fees may be paid by the NHS (you may qualify for help with care funding, called NHS nursing care contribution – or you can receive full funding, called NHS continuing care. To be eligible for continuing care you must be deemed to have a "primary health need").

It is likely that a high proportion if not all of your income will be used towards payment of the care home fees. The remaining shortfall will need to be covered through savings, investments or sale of a property.

You could use the income generated by savings and investments or cash them in and use the resulting capital. You may need to sell your home or other assets (there are companies who offer cash advances to cover the initial care fees, or will give an immediate sale, although this will not be for the full value of the property). You could also opt for a Care Fees Annuity or payment plan, purchased by a single payment to an insurance company who will then pay the care fees on your behalf for the rest of your life. Most annuities are transferrable across care homes and can be topped up if your care needs increase in the future.

Step Four – Get Advice
Sorting out your finances in order to pay care fees can be complicated, especially when there may be urgent or emotional choices to be made. It is important to talk to your local authority for details of funding and benefits and a specialist care fees advisor who can help you choose the most suitable option for annuities and other investments.

Helpful links

Casesenior – Later Life advisors for the provision of financial and legal services for the over 60’s.

Directgov - find your local authority

Author: Mark Sadler

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