Paying for care and how to fund it
When it comes to choosing care there are many things to consider and a main consideration is how much care will cost and how to fund it.
How much does care cost?
Care fees vary depending on the area that you live in, the level of care and the individual care home or home care provider. Home care costs are a minimum of £21 per hour, a care home place is around £1,000 a week and a nursing care home place at least £1,300 per week. There are many ways to cover these costs, which we will look at below.
How to fund later life care
Many people worry that they will have to sell their home to pay for care at home or care home fees, so straight away we want to let you know that the value of your home is only taken into account if you are moving permanently into a care home and if you have no partner living in your home. If you are continuing to live in your home or if you have a spouse of partner continuing to live in your home, the value of your home will not be taken into account when assessing the level of care costs you will be asked to cover.
The 5 main ways in which care is paid for are as follows and we look at these in more detail later in the article:
1: Local authority funding – You may be eligible for the local authority to cover some, or all, of your care cost.
2: NHS funding – If you have a nursing need, the NHS could pay for some or all of your care.
3: State benefits – Everyone needing care is likely to be eligible for an attendance allowance – it’s the most under claimed benefit in the UK.
4: Using your own property If you own a property you might opt to use some of the value in your home to help pay the cost of home care and any home adaptations or improvements.
5: Financial investments If you have assets over £23,250 it is advisable to speak with a specialist Independent Financial Adviser. They can advise you on specialist care funding products.
Local Authority Funding
Once you have decided you would like to investigate arranging care the first step is to arrange an assessment with the council to assess the level of care you need. Once this has been completed the council will arrange a financial assessment to determine how much you will be asked to pay for care costs.
If you are going to be receiving care at home, the financial assessment looks at your income and savings to work out how much the council pays and how much you will have to pay for care.
If the needs assessment finds that you need to move permanently into a care home, the assessment will also include the value of your property. All efforts are taken to help you receive the care you need to remain in your home as it is so beneficial to be in our familiar surroundings and neighbourhood for as long as that is possible.
Here’s how the financial assessment for care will look at your income and savings, and how this will affect how much you will pay for care. Remember that if you are to be receiving care at home the value of your home is not taken into account:
- Capital over £23,250
You will pay the full care frees
- Capital £14,250 -£23,250
The care fees will be shared between you and the council
- Capital Less than £14,250
The capital will be ignored but eligible income will be taken into account so you may still need to cover some of the care costs.
It’s important to remember that if you’re paying fees yourself and your capital reaches less than £23,250 the council will contribute to the costs, so contact the council to request an assessment a few months before your capital is due to drop below this amount. A couple of other things to note are that when taking into account income, certain disability benefits may not be counted in the means test. If you have joint capital, such as a savings, it will usually be treated as divided between the partners.
If your needs are primarily health-based, the NHS may arrange and pay for your care. If you are eligible for this your care home placement or home care costs may be free. The process can be complex and the Beacon CHC website provides a great deal of advice.
Several state benefits exist to help you to pay for your care and these benefits aren’t means-tested, so they don’t take into account income and savings. Attendance Allowance is a payment for people over State Pension age who need extra help to stay independent at home due to an illness or disability. If you have a carer they could be eligible for Carer’s Allowance.
Using Your Own Property
If you own a property there are further opportunities for funding your care without selling your property, one of which is to rent out your property. Another option is to arrange a deferred payment agreement. This is effectively a loan from the local authority which will pay your care home fees and use your property as security against the loan. You can delay repaying the loan until you choose to sell your home in the future, or it can be deferred until after your death. After your death, the costs will be paid from your estate.
You may also consider a later life mortgage which can release some of the value of your home as cash without having to sell your home. This can be used to fund in-home care or modifications to your home not covered by the local authority.
We hope this guide has helped you to understand care fees and how to pay for them. We are always happy to discuss your needs so do get in touch.