If you need care or to go into a home, who pays?

Find out all you need to know about the costs of care

Sarah Pennells – Virgin Money Living Mentor

by Sarah Pennells | Independent Money Mentor

Founder of SavvyWoman and award-winning journalist

Social care, and who pays for it, is rarely out of the news headlines. No wonder – everyone’s living longer (thanks, science), and whether it’s due to ageing or other reasons, we’d all like to think that we’ll be looked after when we need it the most. And while there may be some major changes to the system in the future, what do the current rules say now about who pays if you need care? Below you’ll find out about what financial support you may be entitled to and when you’re expected to pay.

Social care around the UK

It’s worth saying here that there are some differences in the social care systems in England, Wales, Scotland and Northern Ireland. I’ll highlight this, using the rules in England as a starting point.

What care do you need?

The first step, whether you think you need some help so you can stay in your home or that you may need to be looked after in a care home, is to get an assessment of your needs. It involves your local social services department assessing what you’re able to do and what you need help with. In Northern Ireland it’s carried out by your local Health and Social Care Trust. It’s your legal right to have this ‘needs assessment’. You shouldn’t be refused if you ask for one.

At this point it gets a bit complicated, but bear with me. Depending on why you need care and what type of care you need, the NHS may pay for some or all of your care costs. But, equally, you may have to pay the costs from your own money.

When the NHS pays for your care

If the NHS pays the whole cost of your care, it’s not means-tested, so it doesn’t matter how much money or savings you have. The dividing line between who gets free care from the NHS (called NHS continuing healthcare) and who has to pay for their care may not appear logical, and it’s certainly come in for some criticism over the years.

That’s because it’s not dependent on you having a particular illness or diagnosis and it also doesn’t depend on whether you have care in your own home or in a nursing home. But in very simple terms, the test to see if you qualify for NHS continuing healthcare funding will look at the help you need and whether your health needs are complex, intense or unpredictable.

If you want more information on how you’d be assessed look up ‘NHS continuing healthcare’ on the NHS choices website.

If you don’t qualify for this level of funding from the NHS, and you need to go into a nursing home, you may still get NHS-funded nursing care. That’s a contribution towards your nursing costs, rather than the NHS paying the whole lot, and it’s paid at a flat rate. In the current tax year, it’s £155.05 a week in England, £140.90 a week in Wales and £100 a week if you’re in Northern Ireland. The money is paid directly to the nursing home.

Do bear in mind that you don’t get this money if you’re in a care home that’s not registered to provide nursing care. Some care homes are aimed at people who need some help, but don’t provide nursing care.

In Scotland, you get financial help towards both your nursing and what’s called personal care (help with eating, bathing, going to the toilet etc). You have to be aged 65 or over and you must be living in a care home and assessed as needing care. You’ll get £171 a week for personal care and £78 a week for nursing care.

If you’re sectioned under Section 3 of the Mental Health Act (perhaps because you have dementia), you are entitled to have all your care costs paid if you need to go into a care home after you’ve been treated. It’s called mental health aftercare or Section 117 aftercare and it’s not means tested.

Will you have to pay for your care?

In order to explain who pays for your care, I’ll assume that you don’t qualify for NHS continuing healthcare funding, NHS-funded nursing care or mental health aftercare. Instead, I’ll assume you need personal care only, which social services oversee.

Once you’ve been assessed to work out what help you need, the local authority will need to look at whether you qualify for any means-tested help. In order to do this, they’ll carry out a financial assessment. If you know you won’t qualify for any financial help with your care costs, you don’t have to have your finances assessed.

The assessment includes a number of questions about your own finances, including how much you receive from any pensions you have (including state and company or private pensions), how much you have in the way of savings and whether you own your own home.

If you have money and assets worth more than a certain amount, you have to pay for your care yourself (it’s called ‘self funding’ in the jargon).

The thresholds for the level of savings and assets that mean you don’t qualify for help with your care costs from social services vary around the UK. They are

  • In England: £23,250
  • In Wales: £30,000 for care in a home and £24,000 for care in your own home
  • In Scotland: £26,500
  • In Northern Ireland: £23,250

If you have savings, investments and your property (if that’s taken into account, which I’ll come onto next) above this level, you have to pay for your care yourself. If you have assets below this level, you may get local authority funding towards your care fees.

Confusingly, there’s a second, lower, threshold in some, but not all parts of the UK. And where there’s a second threshold, you need to have assets below this level for the local authority to ignore their value completely. In England this threshold is £14,250 and in Scotland it’s £16,500.

If your savings etc are worth between the lower and upper thresholds, say between £14,250 and £23,250 in England, you’d have to pay £1 a week towards your care for every £250 you have.

What about your house?

It’s often said that you can be forced to sell your home to pay for care. Technically, it’s not quite that brutal but the end result can be the same. If you own your home, the local authority can take its value into account when working out whether you can pay for your own care in a care home. But there are some exceptions.

These include:

  • If your husband, wife, civil partner or partner lives there
  • If another relative who’s 60 or over lives there
  • If a child of yours under 18 lives there
  • If a family member who’s disabled lives there

If your home is owned, say, 50:50 with someone else (perhaps your adult son or daughter), but they don’t live there, the council can only take into account what a ‘willing buyer’ would pay for your share. This may not be the same as 50% of its value.

Getting your care paid for

If, after all the assessments have been carried out, you qualify for financial help from your local authority, that doesn’t mean that it will pay for your care. The local authority pays towards your care, but is unlikely to pay the whole bill, even if you have very little by way of savings or investments.

What happens is that your income, which could include your state pension and any workplace or private pensions you have, will be taken into account and you’re expected to use these to pay towards your care. You’ll be left with what’s called a personal expenses allowance of around £25 a week (just over £26 in Scotland).

Topping up your care fees

Just to make things a bit more complicated, if your local authority pays towards your care in a home, it often pays the care home a significantly lower rate for a place than someone who’s paying for their own care.

Many care homes will still offer a place to someone who’s being funded by the local authority, even though they’ll get less for them than they would for a privately funded resident.

But, in some cases, if you want to move into a care home that’s more expensive than the local authority rate, a family member may have to pay what’s called a ‘third party top-up’. Councils can’t just ask for this extra money routinely. They can only do so if they can show that you could have gone into a cheaper care home and been cared for properly, but chose not to. The important point is that this top-up money has to come from someone else (which is why it’s called a ‘third party’ top-up). It can’t come from your own savings or pension.

Delaying paying for care

If you have to pay for your own care in a home, you may be able to delay paying. You can do this by asking your local authority to pay your care fees for you, put a charge against your home and reclaim the money from the sale of your house after you’ve died.

Not everyone qualifies for this so-called ‘deferred payment agreement’ but it is worth asking about. There’s no formal deferred payment agreement scheme in Northern Ireland, but elsewhere it should be offered. In England and Wales you can be charged interest (although the level is capped) but in Scotland it’s interest free while you’re alive.

What to do if you need care

No-one wants to think about losing their independence, but far too many people end up going into a care home as a result of a crisis. It may be a fall in their home or their husband, wife or partner (or other family member who cares for them day to day) becoming ill.

So, to avoid having to make long lasting decisions in a hurry, I’d recommend thinking about the kind of care you’d like – and talking about it with your spouse or partner (and your children if you have them) before you need it.

Where to get help

There’s lots of information online on how to pay for care and what to think about, so that’s where I’d start.

If you want to find a care home;

  • Check the CQC website (Care Quality Commission), as it regulates care providers.
  • The UK Home Care Association has a downloadable guide to choosing care at home.
  • a class="external" href="https://societyoflaterlifeadvisers.co.uk/" target="_blank" rel="noopener">The Society of Later Life Advisers website has a Find an Adviser section if you’re looking for a financial adviser who specialises in advising older people.

Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.