Financial guide to moving into a care home
Moving into a care home is a major decision which demands careful consideration. In normal circumstances you will be expected to pay towards the cost of your care.
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.
The Gateway to Care Team 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 be sure that the assessment is full and accurate, you will be asked for details about your finances including your income, details of any property you own, and any capital or savings you have. All this information will be treated in the strictest confidence.
Calderdale Council's Residential and Nursing Care Home Charges leaflet gives a full overview of the charges and how they are calculated. Residential and Nursing Care Home Charges from April 2017|
Here is a short video Video: Residential Care Costs| which explains how residential care home charges are calculated.
Income from all sources will be considered in the calculation, although there will be certain income which is disregarded in accordance with the national guidance.
Your income includes any company, personal and state pensions and any benefits such as Pension Credit, Income Support, Attendance Allowance, Disability Living Allowances (except Mobility Component) and Personal Independence Payments (PIPs) - provided that your entitlement to receive these payments continues after moving into a care home.
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 partner, former partner or civil partner (except where you are estranged or divorced from your partner, former partner or civil partner)
- a lone parent who is your estranged or divorced partner
- certain relatives or certain members of your family who are: aged 60 or over; or are your children aged under 16; or incapacitated
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.
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.
Deferred Payment Agreements
A Deferred Payment Agreement enables people to use the value of their homes, if the criteria are met, to pay for their care costs.
If you are eligible for a Deferred Payment Agreement, Calderdale Council will help to pay your care home bills on your behalf. You can delay repaying the Council until you choose to sell your home, or until after your death.
The Council may charge interest (based on rates set by the Government) on the amount owed, and there may also be fees for setting up the arrangement. These will be set to cover the Council's costs and not to make a profit.
For further information about Deferred Payment Agreements, please contact our Gateway to Care Team who will be happy to help.
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')
- Savings certificates
- Premium bonds
- Stocks and shares
- Savings in building society accounts, bank accounts, deposit accounts, special investment accounts
- Unit trusts
- Co-operative share accounts
- Capital held by the Court of Protection or a receiver appointed by court
- If you have capital of £14,250 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 £14,250 but less than £23,250 then you will have to make a contribution to the care home fees. For every £250 or part of £250 over £14,250 you will be considered to have another £1 a week of income.
- If you have capital of more than £23,250 you will have to pay the full cost of your care in the Care Home, until your capital drops to £23,250, 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 the Council 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 notify Gateway to Care if your income or capital change, since this could affect your contribution. The Charging Assessment Team will review your contribution every April.
If your choice of home charges more than the Council is prepared to pay ("Third Party Contributions")
You may be able to move into this choice of home provided that the Council agrees that it meets your care needs and that the Council can make a suitable contract with the home. But someone else (such a relative or friend but sometimes a charity or benevolent fund) must give an undertaking to the care home to pay the difference between the contract charge and the actual charge for all the time that you live in the home. This payment (known as a "Third Party Contribution") is liable to rise as home fees increase.
If the fees at your care home go up
The Council will have a contract with the care home you are in, which will include an agreement on increases in fees.
Your own money
If the Council is 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
The Council will make a contract with the home and you, and will pay the fees to the home. The Council will ask you to pay your contribution by sending you or your representative an invoice.
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 Gateway to Care. The home should not ask you for any more money, except for extra things you choose to purchase.
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 April 2015 but changes do occur. For the latest information contact Calderdale Council Revenues and Benefits Service (Charging Assessment Team) on 01422 393639.