This information was reviewed and updated to comply with latest guidance and regulations on July 14th, 2016.
This is a fact sheet which explains the rules for eligibility for NHS and local authority funding to pay care home fees. It also describes the allowances people living in care homes are entitled to, including those who are funding their own care (self-funders).
Capital Allowances (for Local Authority Funding)
Upper Limit: £23,250
Lower Limit: £14,250
If you have capital above the upper limit, you will be required to pay the full cost of your care home until your capital drops to this amount. Capital includes your home, although there are some circumstances when it will be disregarded from the means test. e.g. if your partner continues to live there.
Twelve Week Property Disregard
The value of your property is disregarded from the means test for the first 12 weeks of permanent admission to a care home providing other assets are below the higher capital limit. In this instance, for up to 12 weeks or until the home is sold, your Local Authority will cover the costs of the home and carry out a means tested assessment to determine how much you have to contribute towards the fees from your own income, such as pensions and attendance allowance. (N.B. The attendance allowance, if it has not already been stopped because you have been in hospital for 28 days, will be suspended from the end of the 4th week and will need to be re-activated after the 12-week period). The Local Authority will not usually pay any top up fee (see below).
The funding the Local Authority provides for the 12 weeks does not need to be repaid.
Options after 12 Week Property Disregard
In these circumstances it is advisable to seek specialist financial and legal advice. Options may include the following:
- Deferred Payments Agreement (at the discretion of the Local Authority)
- Reviewing Pension Credit and Attendance Allowance
- Care Fee Income (annuity) Plans
- General Investment
Personal Expenses Allowance
If you are eligible for Local Authority funding, you will normally have to pay all your income towards the care home fees apart from a personal expenses allowance of £24.90 per week.
Lower Rate: £55.10 per week
Higher Rate: £82.30 per week
This is a non-means tested benefit that can be used to pay towards care costs. The lower rate is paid if care is needed either by day or night and the higher rate where 24-hour care is needed. You are not eligible to receive Attendance Allowance after the first four weeks of residence in a care home if you are in receipt of Local Authority funding unless it is interim funding or a Deferred Payments Agreement. If you are self-funding, you can continue to claim Attendance Allowance.
We explain more about benefits and allowances for people living in care homes here.
Third Party Contribution (for more expensive accommodation)
In the event that the price of any care home exceeds the Local Authority’s contracted price, you must be aware of the requirement for a Third Party Contribution, which is known as a Third Party Top Up.
The third party contributor must complete the agreement to pay top-up fees and sign the appropriate documentation prior to the placement being finalised. Residents who have accessed the 12-week property disregard or are in receipt of deferred payments, may be able to pay “Top Ups” out of their own resources or defer the top up against the future sale of the property.
We explain more about third party top-up fees here.
NHS Nursing Contribution (Funded Nursing Care)
If you require nursing care funded by Social Services or self-funding, subject to an assessment from a registered nurse, you may be eligible for help towards the nursing costs. This is known as NHS Funded Nursing Care. It is not means tested and is paid directly to the care home. On July 13, 2016, the Government announced an increase in the amount paid for funded nursing care in a care home.
All eligible residents are now entitled to £156.25 per week.
Residents who received the high band rate of £139 before 1/10/07 will continue to receive a higher rate of £215.04 subject to further reviews of their case.
If you think your relative may be entitled to funded nursing care, you should apply to your local Clinical Commissioning Group (CCG) who are responsible for carrying out assessments. You could also ask your GP for advice.
NHS Funded Continuing Care
Some residents, following an assessment, may be eligible to have their care funded by the NHS. Generally, they will have very high care needs or require frequent and specialist treatment. NHS funded continuing care is not means tested. There is a national framework for determining eligibility in order to provide fair and consistent access to funding regardless of location in England. CHC funding is reviewed at regular intervals and may cease. If, at review, funding reverts to Local Authority, the Authority will only fund placements at the agreed Local Authority rate and will not enter into negotiations regarding any other amount. A family member is entitled to enter a third party agreement if agreed.
We explain more about continuing healthcare funding here.