How To Pay
For Care Homes
£23,250
In England, anyone with more than £23,250 in savings will have to use part of those savings to contribute towards the cost of their care. This threshold has been frozen since 2010-11. The limits are higher in Scotland and Wales.
£41,600
What it costs you to fund to stay in a care home each year, on average.
Prices can vary enormously but you can expect to pay over £100 a night, or around £40,000 a year.
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Most local authorities pay less than care home costs, and although the exact amount varies from area to area, in many areas the fee gap is over £150 per week. In Birmingham, for example, the 2023/24 fee shortfall is £177 per week for general nursing care to £208 per week for residential care of older people with dementia, according to Healthcare Data provider LaingBuisson
48%
Almost half of people have to pay for their own care. Care homes providing care for older people remained the care homes with the highest proportion of self-funders (48.9%), which was statistically significantly higher than all other care home types; care homes for younger adults remained the lowest (2.0%).(Source ONS)
57%
Over half of people who apply for financial assistance to pay for their adult social care, are turned down by the local council.
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It can Be Cheaper To Pay For A World Cruise Than Pay For A Care Home
The annual cost of living in a care home has soared 9.6% year-on-year to £41,600 in 2023, according to healthcare data provider LaingBuisson.
So we know that care homes are expensive. The big question is how to pay for them?
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Almost half of all care home residents over 65 are self-funders. That might be because they want a better home than the state is willing to fund or that they have savings that the state feels are too high and won't therefore help with the bills.
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There is however state help to fund a plate at a care home. Just how much the state is willing to pay gets a little complex. But there is a general principle that they want you to contribute, if you have assets/savings or income,
Working out just how much you need to contribute can feel a bit like being stuck at the back of the maths class trying to follow the teacher's formula but mainly thinking that you'd be better suited to watching the latest episode of Pointless and looking out the window pondering such questions as whether fish find stuff funny?
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Anyway, here is the general outline of how they work out what you need to pay towards the cost of the care,
AgeUK say the calculation used to work out how much you pay, is often misquoted in the press and it is more complex than it is often reported. So here is generally how it works:
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The principle is that you pay or contribute towards the cost if you can afford to.
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In England, if you have less than £14,250 in savings, they ignore your savings but any income you have, even from pensions will have to go towards the cost of your care. If you have savings or assets valued at between £14,250-£23,250, they assume you have extra income. This is called 'Tariff Income'. It's like the income you get in your dreams because you don't actually get the income, they just assume you do. You are treated as having £1 in tariff income for every £250, or part of £250, between £14,250 and £23,250. For example, if you have £14,500 in capital, you are treated as having £1 a week in tariff income. That income needs to go towards your care home costs.
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Once your capital reduces under £14,250, you cannot be treated as having any tariff income. However, you still need to contribute from any actual income included in the means test, i.e. from pensions and benefits. For example, once your capital/savings has gone under £14,250, you'd still need to contribute any actual income you get from pensions or other sources, towards the cost of your care.
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For more details, ageUK has a useful and very detailed guide to the rules themselves - which is available Here
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In Scotland and Wales, the principle is the same, they want you to contribute if you can but the savings/assets limit are different.
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In Scotland, the lower limit is £20,250. Below that, the council will pay towards your care home fees. Your own contribution towards your care home fees will be assessed based on your financial circumstances. For more details click Here
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In Wales, the limit is £50,000. Local authorities must ensure you are left with at least £39.50 a week to spend on personal items. For more details click Here
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You May Have More Savings Than You Think
Even if you don't have a lot of cash savings, you may still be seen as having too much. That's because the value of your home is included in the assessment of what capital you possess.
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But even if you own your home, you may still qualify for financial support. That's because your property will be discounted from the means test if a spouse or civil partner still lives there, or if you want to receive care at home. So your property is disregarded in the Permanent Care Home Means Test if your partner lives there, even if you are not married or in a civil partnership with them. Also, the property can be disregarded if a relative lives there in certain circumstances.
The Rules Of Thumb Are:
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Non-residential care (i.e. care services in your own home): Your main or only home is disregarded in the means test, irrespective of whether anyone else lives in the property.
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Short-term/temporary care in a care home: Your main or only home is disregarded in the means test, irrespective of whether anyone else lives in the property.
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Permanent care in a care home: Your former main or only home is disregarded in certain circumstances. For example, it is disregarded if it is the main or only home of either: your partner, civil partner or spouse, a relative aged 60 or over, or a relative who has a disability. ageUK gives the full list of circumstances where the property is disregarded in the permanent care home means test in section 5 of factsheet 38, Property and paying for residential care.(Click HERE for link)
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Either way, clearly £41,000 is a lot of money to spend on a stay in a care home.
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To set it in context, today I looked for a world cruise with P&O. I can stay on board and travel the world for 99 days for £9,629. Which is a little under £30,000 for 12 months travelling the world. In other words - it's cheaper to go on a world cruise than stay in a care home.
Although of course - while on board, you get a band and a buffet - there's no personal care on a cruise and it's really not somewhere to be going if you are not well or in need of a lot of support.
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Paying for care in your own home.
You should expect to pay at least £25.95 per hour for a caseworker, according to the Homecare Association. If you had help for just 4 hours a day that would cost you over £37,000 per year.
If you are employing someone full-time - remember you may have obligations as an employer, such as managing their PAYE tax and offering them a pension.
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Regardless of whether you pay for in-home help, you may need to make alterations to your home. Many are very cheap but stairlifts, for instance, can cost
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Regardless of whether you pay for in-home care, you may have to make smaller adaptations to your home. Many are very cheap but a stairlift can be very expensive, in excess of £2,000
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Getting Financial Help To Adapt Your Home
You have the right to an assessment by your local authority if you need support with daily living because you’re:
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elderly
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disabled, or
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you have a long-term health condition
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If you haven’t already, contact your local council’s social services department to have your needs assessed.
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Minor adaptations and equipment
Minor adaptations may include special easier-to-use bathroom and kitchen taps and handrails in the home.
Major adaptations may include more accessible shower or lowering the worktops to make cooking easier.
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Rules vary depending on where you live
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If you live in England
Your local authority will normally provide you with disability equipment and small adaptations costing less than £1,000 free of charge. This is as long as you’ve been assessed as needing it and you qualify.
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If you live in Wales
You might have to pay towards disability equipment and minor adaptations. But the amount you’re asked to pay must be reasonable and based on your financial circumstances.
If you live in Scotland
Your local council will normally provide you with essential equipment or adaptations costing less than £1,500 free of charge.
If you live in Northern Ireland
Your local trust will decide whether they’ll fund the equipment or minor adaptation, or whether you’ll have to pay for it yourself.
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What financial help can I get?
Help & Advice
Anyone who has ever dealt with any official department is likely to know how complex and frustrating it can be and that's especially true if at the time you are worried, upset and in quick need of help. Getting financial assistance can be very complex - but a charity called XXX can help guide you through the system and even appeal against any decision not to give you financial assistance. They are Beacon CHC and can be found at https://beaconchc.co.uk/
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Beacon is a social enterprise, whose team members have over 20 years’ experience in Continuing Healthcare support. They are a supplier for the NHS England Free Information and Advice service and deliver casework services across England.
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Some of the major assistance packages include these:
Attendance Allowance
This is NOT dependant on how much you earn or the value of your property, in the jargon of benefit is is therefiore 'non-means-tested.' You can get £68.10 a week (as of Nov 2023) if you need supervision either during the day or at night. It rises to £101.75 if you need supervision both night and day, or if you have a terminal illness.
Continuing Healthcare Payments
This is specially designed to help those with very complex needs. NHS Continuing Healthcare is a package of care for people who are assessed as having a 'primary health need'. It's arranged and funded by the NHS.
If you receive care in your own home the NHS covers the cost of the care and support you need.
If you receive NHS continuing healthcare in a care home the NHS pays your care home fees.
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Speak to your healthcare provider, doctor or social worker if you think you might be eligible for NHS continuing healthcare.
You can also approach your Integrated Care Board (ICB) and explain why you believe you should be considered for NHS continuing healthcare. A team of health and social care professionals will complete a Decision Support Tool, and make their recommendation on whether or not you’re eligible. You and/or your representative can attend and take part in this meeting. (See help from Beacon CHC). If you're not happy with a Checklist decision you can ask the ICB to reconsider your case. If you're still unhappy, you can use the NHS complaints system to pursue your case.
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If you don’t qualify for NHS Continuing Healthcare payments, but have been assessed as needing to live in a nursing home, and need help from a registered nurse, the NHS pays a flat rate contribution to the home – known as NHS-funded nursing care.
NHS Nursing Care Assistance
This is designed for nursing home residents who cannot get funding through NHS Continuing Healthcare. NHS pays the care home £209.19 a week to cover nursing fees (as of Nov 2023)
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Personal Independence Payments
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Disability Living Allowance is being replaced by Personal Independence Payments.
Personal Independence Payment (PIP) can help with extra living costs if you have both:
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a long-term physical or mental health condition or disability
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difficulty doing certain everyday tasks or getting around because of your condition
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You can get PIP even if you’re working, have savings or are getting most other benefits.
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There are 2 parts to PIP:
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a daily living part - if you need help with everyday tasks
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a mobility part - if you need help with getting around
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The Department for Work and Pensions (DWP) will assess how difficult you find daily living and mobility tasks. For each task, they’ll look at:
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whether you can do it safely
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how long it takes you
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how often your condition affects this activity
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whether you need help to do it, from a person or using extra equipment
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Another Idea
Retirement Homes
You may well feel that you or your relative doesn't need to use a care home at this moment but still can't or don't want to live entirely on your own. There are a large number of retirement developments which are built to cater for older people, with better access and facilities than you would normally find in a flat and with communal dining available and staff on hand if needed, but where residents live entirely independent lives.
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Residents own the properties as opposed to just staying in them.
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These have felt like a great idea and indeed still serve a hugely helpful role. However, there has been a rise in problems with families unable to sell them. While they remain on the market the family has to pay high service charges to cover the facilities which are on offer, even if their family member is no longer living in the flat. I know ow of stories where the valuations of the property itself have dropped significantly and the family is seeing money drain away.
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While they can be a great solution to a care problem, you should go into it knowing both the pros and the cons.