Paying for care
Making decisions about caring for a loved one is complicated and can often be a stressful time for families. Lots of people worry about how to pay for a care home and find making decisions daunting with the care system complex and time-consuming to navigate. However, don’t despair! There’s plenty of help at hand to help you explore funding options. Social Workers, Financial Advisors, Care Home Managers and other organisations such as Age UK or the Citizen’s Advice Bureau can offer advice and information. In our blog we asked Country Court Care’s Financial Director Al-Karim Kachra to help us understand some of the frequently asked questions.
How much will I have to pay for care?
The cost of care and who pays for it will depend on personal circumstances. The amount payable for care can be influenced by several factors including:
- Savings or property: At least part of the care home costs may be paid for by a Local Authority depending on how much capital such as savings or a property the individual has.
- The type of care and how much care is needed: The level of dependence and specialist care such as nursing will affect costs.
- Individual care home fees: Each care home prices its’ services differently, however all care home fees include accommodation, meals and laundry. Check how any extra costs such as hairdressing, entertainment or chiropody will be charged.
Will my local council or NHS pay care home fees?
This will depend on your individual situation, but care might be paid for in the following ways:
- Local Authority
- NHS Continuing Healthcare (Nursing needs)
A financial assessment will be conducted to establish whether the local authority will contribute towards care costs and if so, how much this will be.
If a person’s assets (including property) have a total value of less than £14,250 care bills will be paid in full by the State, although they may expect a contribution if certain benefits or any income are being received. A reducing scale of support applies between £14,250 and £23,250, based on a person contributing £1 a week for every £250 in assets over £14,250.
In England, if savings or the value of a property exceed £23,250 an individual will need to pay for care costs themselves in full.
A financial advisor or a specialist care fees advisor such as Eldercare will be able to advise on the best options for each individual situation.
What are the options for self-funding long-term care?
There are many options and this will depend on your personal situation, I strongly recommend speaking to a financial advisor. Broadly speaking the options may include:
- Income: This means pensions, savings, investments or rental income from a person’s home may pay for the cost of care.
- Family contribution: The person’s family may be able to cover all or part of the cost of care, or difference in cost, as a ‘top up’.
- Savings accounts: This includes money in deposit accounts, cash, ISAs and National Savings.
- Care Fees Plans (Immediate Needs Annuity): This is a specialist insurance plan that converts capital into income to help meet care fees. In return for a one-off lump sum, a guaranteed tax-free income for life is received, provided that it is paid directly to the care home.
- Houses and property: If the individual owns their own home it is likely to mean that they are above the upper capital limit for local authority funding and will therefore be responsible for covering their own costs.
If you have a property but not enough liquid assets (cash, savings etc.) to pay your care fees, you may be eligible for Local Authority assistance under a scheme called the Deferred Payment Scheme (this may be called by different names depending on the Local Authority). A deferred payments scheme (DPS) is designed to help people who have been assessed as having to pay their own residential care but are unable to pay because their capital is tied up in property or land and have savings less than £23,250 You will need to contact your Local Authority to arrange for a Social Worker to discuss the options available to you. Note that some Local Authorities will charge for this service and add the administrative cost to their final fee reclaim once the property is sold.
It is the responsibility of the individual to claim for any benefits that they are entitled to, however these may change upon moving into a care home.
Exactly what benefits an individual is entitled to and how they affect their financial assessment will depend on their personal circumstances. It is a good idea to seek advice, if you have any questions you can email us at email@example.com.
Al-Karim Kachra, Finance Director, Country Court Care