You are here: Home: Health and social care: Residential and nursing care: Financial guide to moving into a care home

Financial guide to moving into a care home

If you need help with the costs of moving into a care home, you will be asked to complete a financial assessment form, so that the amount you have to contribute can be worked out.

What you will have to pay is worked out on the basis of a national set of rules.

Social Services can explain the rules to you and can arrange for you to have an estimate of your likely contribution before you make a final decision about moving into a care home.

To make sure we carry out a full and accurate assessment, we will ask you for details of your finances including your income, and details of any property you own, and any capital or savings you have. We will treat all this information as strictly confidential.

Income

Your income includes any company, personal and state pensions and any benefits such as Pension Credit, Income Support, Attendance Allowance, and Disability Living Allowances (except Mobility Component) if you will still be entitled to these when living in the care home.

Property

If you own your own home, its value will generally be added to your 'capital' when this is calculated. But its value will be ignored if:

Your home's value will be based on the selling price, less any debts (such as mortgage) charged on it, and less a further ten per cent to cover selling expenses.

If you jointly own other property we will only value your share.

From 9 April 2001 the Regulations changed regarding the treatment of property owned and occupied prior to moving into permanent residential or nursing care. If you enter residential or nursing accommodation as a permanent resident the value of your property will be disregarded for the first 12 weeks. This offers a 'breathing space' between entering a care home on a permanent basis and deciding how best to pay for your care. If the property is sold within the 12-week period then this disregard effectively ceases from the date of sale.

From October 2001, on request to the Council, the Council may allow you to defer part of your assessed contribution to your fees, and the Council will cover the shortfall, although you will still be required to contribute assessed income and other assets to the fees.

You, or your estate, would only pay back the deferred contributions when you sell your home or when you leave residential care. The council will not charge interest while payments are being deferred; although reasonable interest may be levied if there is delay when repayment is due. The agreement between you and the council will be put in writing and signed, and a copy given to you.

If the Council agrees your request for deferred payments, you are advised to seek independent financial advice before arrangements are finalised. You should particularly check your entitlement to income support or Pension Credit, and attendance allowance or the care component of disability living allowance. If your property is to remain empty for any period you will need to look into issues of security, insurance and maintenance.

The Council will only accept applications for deferred payments where there is no outstanding charge or other loans secured on the property.

It is possible the Council may turn down your request because of other priorities. The reason will be given to you in writing, and you will be advised on how to complain about the decision.

If you are eligible to enter onto the Deferred Payment Scheme but you decide not to and you are unable to meet the full charge as assessed by the Charging and Assessment Team, you must make arrangements to sell the property to fund the care placement.

Savings and capital

Many things are considered as savings and capital in your financial assessment. Examples are listed below, but this is only a guide and is not a complete list.

• Land and buildings (see 'Property')
• Cash
• Savings certificates
• Premium bonds
• Stocks and shares
• Savings in building society accounts, bank accounts, deposit accounts, special investment accounts
• SAYE
• TESSAs
• PEPs
• Unit trusts
• Co-operative share accounts
• Capital held by the Court of Protection or a receiver appointed by court
• If you have capital of £13,500 or less this will not be taken into account but you will be expected to contribute towards the cost of your care from your income.
• If you have capital of more than £13,500 but less than £22,500 then you will have to make a contribution to the care home fees. For every £250 or part of £250 over £13,500 you will be considered to have another £1 a week of income.
• If you have capital of more than £22,250 you will have to pay the full cost of your care in the Care Home, until your capital drops to £22,250, or less.
• If you have joint beneficial ownership of capital the value will be divided equally between the joint owners and you will be treated as owning an equal share irrespective of who first provided the capital.

We may ignore some types of capital from your financial assessment. These can include the surrender value of a life insurance policy or annuity and personal possessions such as a painting or an antique.

Giving away your assets

Some people think that if they have given away assets - savings, capital, house or other property - some time before moving into a care home it will not then affect the amount they will have to pay for care.

But there is a rule known as 'Deprivation of Capital' which says that if the significant purpose of giving away the asset was to get help, or more help, from Social Services with the cost of care then we may assume you still possess the actual capital.

It will be up to you to prove that you no longer have the resource if ownership is disputed. You will need to provide written evidence, such as a trust deed, a deed of gift, receipts of expenditure or proof that debts have been repaid or we may treat you as if you still owned the asset and charge you accordingly.

You should note that a Will is not enough to allow a property to be ignored from your financial assessment. It is important that you get legal advice if you are considering transferring your property to, say, a family member or selling your home before moving into a care home.

Alternative sources of funding

In some cases it may be financially advantageous for you to meet the fees for residential care or nursing care from your own resources rather than have recourse to local authority funding. If you have a house to sell and significant capital available, discuss this with your assessor.

If your finances change

You must tell Social Services if your income or capital change, since this could affect your contribution. The Charging Assessment Team will review your contribution every April.

If the home you want to move into charges more than Social Services is prepared to pay

You can still use this home providing Social Services agree it meets your care needs and they can make a suitable contract with the home. But someone else, like a relative or friend, must give an undertaking to the care home to pay the difference between the contract charge and the actual charge for as long as you live in the home. This payment may need to increase as fees increase.

If the fees at your care home go up

Social Services will have made a contract with the care home you are in which will include an agreement on increases in fees.

Your own money

If Social Services are contributing to your care costs you will also receive a personal allowance, which is for you to spend as you wish. The home must not use this money to cover the cost of any services, which they agreed they would provide as part of their contract. The personal allowance is for you to spend on things of your choice, for example personal toiletries, treats, presents for friends, and so on.

You will also still have any other income or capital, which is not required as contribution to your care costs.

If you have your Pension or Benefits paid directly in to a bank or such like account, you can either continue to receive them yourself or ask a relative to receive them for you. You will need to contact the Department for Works and Pensions to change pension or benefit payment arrangements.

How the fees are paid

Social Services will make a contract with the home and you, and will pay the fees to the home. Social Services will ask you to pay your contribution by sending you or your representative a bill.

Generally, the fees cover all the normal things a care home would be expected to provide. If you are in any doubt as to what is covered, ask the home to explain or contact Social Services Contract Section. The home should not ask you for any more money, except for extra things you choose to purchase.

Notes

Nothing in this guide should be taken as binding on Calderdale Council and this authority reserves the right to change its policies or procedures with regard to this information at any time.

This information was correct at March 2008 but changes do occur. For the latest information contact Calderdale Council Benefits Assessment Unit (Charging Assessment Team), tel: 01422 393639.

back to top