Council funding vs self-paying: does it affect what you pay for your residential care?
Moving into a care home is not an easy decision to make, but in some cases, it is the best option to ensure that you get the help and support that you need around the clock.
If it is determined by assessment through your local authority that residential care is needed and you fulfill their eligibility requirements, mainly in terms of your ability to pay for your required care, you will likely receive funding from the council to help pay for this. This covers the cost of your care and support, though you may still have to pay for additional living costs.
The council pays the residential home a set amount to cover for your care and support requirements, which is a fixed fee set out by each individual local authority.
Should you experience a change in circumstances, for example a spouse could pass away, increasing your assets, you might find that you are no longer eligible for council funding for your care and support needs. You would become a ‘self-payer’ and responsible for paying for your own place in the residential environment.
You would rightly expect that you would continue to pay the fee that the council was paying for you to continue to receive the same services. However, this is not usually the case. Very often, the fees for a self-payer in a care home are much higher than those paid by the council for a funded service user using the exact same services.
Betty and her husband Jack both had dementia, and as their care needs progressed, the Local Authority and the family agreed a move to a care home was the best option. The Local Authority recommended and arranged the move to the care home and the couple were informed that this would be at the Local Authority rate of £488.56 per person per week. Following the death of Jack in 2014, Betty found that she was no longer entitled to the Local Authority rate and her care fees went from £488.56 to £750 per week. Their daughter Ann says: “When Mum and Dad moved into the care home arranged by the Local Authority, we were given assurances that Mum would be able to stay after Dad passed away, [but] nobody mentioned that the change in circumstances would mean a 54% increase in her care fees.”
A report by The Telegraph in 2013 suggested that the difference between what a council pays for a residential care home place and what a self-payer pays could be as high as 13 per cent. Things haven’t improved in the years since, as a report in The Economic Voice this year published similar statistics, showing a large gap between what local authorities pay and what self-payers pay.
This can have serious consequences, as you might find that you don’t have enough money to continue paying to stay where you are and, therefore, you may have to move into a different environment, which can be upsetting and disruptive.
A large part of the problem and the reason for such a difference in fees is that the council sets its fees lower than the actual ‘real cost’ of providing care to an individual. This cost takes into account the amount that a care home needs to make, per person, to ensure that it can offer its services at a good quality while also turning over a reasonable profit to make it a viable business. As the council’s set fee is often lower than this real cost, there is a deficit that needs to be plugged to keep a residential care home running. One way that this cost can be covered, is by charging self-payers a higher fee, essentially subsiding the council-funded service users.
But what can you do about it? First, you could ask a prospective care home to show you how much the fees are for a self-payer and how much a council-funded service user pays, as this will prepare you for any change in circumstances where you may become a self-payer in the future.
Similarly, if you are already a self-payer, then you might wish to research residential homes that do not accept council-funded service users, so that you can be sure that you are paying the same as what the other residents are and that your payments are being used for your care and support, and not to help subsidise any shortfalls.
If you are able to remain at home, then as a self-payer you can be in control of your care and support, and the amount that you pay more easily by using homecare services. While agencies might face the same problems as residential homes (they also receive a lower fee from a council-funded service user), but contracting with an individual, either with them being self-employed or you employing them, you can agree and set the fee you are willing to pay for the help that you need. Find out more about using paid carers in the home.