Council funding for care
Everyone has a right to ask for a needs assessment from the Council, and the Council has to carry this out without regard to people’s financial circumstances. If they find however that the level of need is such that it meets their eligibility criteria they will then carry out a financial assessment before deciding how much the individual has to pay towards the cost of care.
The rules governing who ends up paying for care fees are very complex, and what follows is very much a simplification. If there is any element of doubt as to how this applies to your situation then it would be a good idea to get financial advice, and we would suggest that you contact the Society of Later Life Advisers, who can put you in touch with a suitably qualified Adviser.
In each Council area there will be a different framework for deciding on the contributions to care fees, depending on whether it is residential care such as a care home, or some other form of community care.
The simplest element to understand is that if the individual requiring assistance has capital assets worth more than £23,250 then they will have to pay for all their care costs themselves. (This is the figure for 2011-12 and is revised each year by the Government). Capital covers things like savings accounts, shares, trust funds and in some cases the value of any property owned. If you continue to live in your property it is not included, nor is it if you move into a care home and a partner or relative over 60 or with some form of disability needs to carry on living there.
If any capital, including the property, is jointly owned then only half of the value is normally counted as the individual’s capital.
Councils will also run deferred payment schemes to help pay for care home fees. This could apply if the person would otherwise be entitled to receive financial assistance except for the fact that they have a property which takes them over the capital threshold. They can however receive money towards care home fees from the Council, if they agree that this can be repaid from the proceeds of selling the property after their death.
In care homes the rest of the assessment is relatively straightforward. Residents have to be left with £23.50 per week out of their income to cover personal expenses. Most other income then has to go towards paying the care fees. If the person is only living in the care home on a temporary basis (up to 52 weeks) then the costs of retaining a house elsewhere will be taken into account, and reduce the amount they have to pay for the care home. If they have capital above £14,250 but below £23,250, then it will be assumed that this means that they have some additional income to help pay for the care fees, and in most cases an assumption will be made that they can afford to pay £1 per week for every additional £250 in capital above the lower limit. This is called “tariff income”
The Council will have a ceiling that they will not normally pay beyond for care homes, but it may be possible in these circumstances for a third party (relative etc) to pay the additional amount if that is what the individual wishes.
If the Council thinks that a property has been sold simply to avoid being charged for residential care, then they will work on the basis that the property is still available at the value calculated, and this is likely to mean the person has to pay the full care costs themselves.
For community care (care in your own home) the value of the property is only relevant if it is an additional property to the one that they live in. The Council also has to make sure that everyone has enough money left after paying their contribution to the cost of care. This has to be at least 25% higher than the rate of the relevant Income Support or Pension Credit amount. The Assessment will compare available income to the total cost of care being provided. In calculating the available income they will ignore some sources of income entirely such as earnings from work, and will also take into account housing costs and additional expenses due directly to disability.. The rules on tariff income will normally be the same as for residential care. Where the individual is part of a couple it is only their income that is being assessed.
If the Council organises the care then they will normally pay the care provider directly and then collect the contribution from the client. If a direct payment is made the contribution will normally be deducted from the payment before it is paid out.
You should be aware that some care services will be free of charge. This is particularly where the money to pay for the service comes originally from the health service. This can include some equipment, services provided to people under the Mental Health Act, and short-term periods of care provided to people after they leave hospital to help them readjust.