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How will the cost of a care home placement be paid
for? |
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DISC Tel: 0845 120 4048 email: info@disc.org.uk
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This fact sheet covers paying for a care home, what a means test is and how charges are
worked out by the local authority. It
will help you to find out if the person you care for will be paying the full
cost of care themselves or if the local authority
will assist with care home fees. It will also explain how nursing care needs
are assessed and paid for. You
may also find the following fact sheets useful
· Finding out what help someone needs and who can provide it. · Making the decision about future plans for care · Visiting a care home · Legislation and dementia · Choosing a care home Paying for a care home The person you care for will fall into one of the following categories 1)
Self
Funded - Have savings in their own name of £20,000 or more. 2)
Partly
Self Funded – Have savings in their own name of between £20,000 and £12,250. 3)
Fully
Funded – Have savings in their own name of £12,250 or less. 4)
Nursing
Care Needs – Paid for by the National Health Service. 1. Self- funded
You do not have to contact your local authority social services if you can afford to make your own arrangements. People who have more than £20,000 savings will not be eligible for financial help from their local authority. They will pay the full costs of the care placement from their own income and savings until their savings drop to below £20,000. · You may need to consider how long you think finances may last, and what would happen if the money ran out. · You can still ask your local authority for information and advice about residential care and for help in arranging the person’s care. The cared for person is still entitled to an assessment even if they are self -funded. · The person you care for can still claim attendance allowance if they are self – funded and continue to satisfy the conditions of entitlement. This could mean a monthly injection of funds over £200 that could help a great deal towards paying a care homes fee. |
How does the local authority work out what someone has to pay?
The
local authority has to follow rules set out in the Charging for Residential
Accommodation Guide (CRAG). This is a
central Government guide available from the Department of Health, website
www.dh.gov.uk.
The rules say that
the local authority is to fix a standard rate to be paid for
accommodation. Each local authority
decides how much it will usually pay for a care home placement. The fixed standard rate will vary from one local
authority to another. If the person moving into care is unable to pay the
standard charge, the local authority carries out a financial assessment (also
known as a means test) to decide how much they can afford to pay towards their
care.
It is advisable to
make an application to the local authority as soon as you know that their
financial assistance is needed. There
may be a long wait.
What gets counted in the
financial assessment?
Savings and Income. The cared for person’s income, savings including their part of joint savings and expenditure will be looked at.
This list is a guide
Savings
· All savings held in, bank or building society accounts National Savings accounts
· Unit Trusts
· Cash
· Trust funds
· Premium bonds
· Stocks and shares
·
The value of property (building or land)
Income
This is
calculated by working out how much money the cared for person has coming in
each week, including income from
·
Most
sorts of social security benefits
State benefits such as minimum income guarantee / Pension credit/ Attendance
Allowance
·
Income
from savings
·
Pensions,
including Occupational or Personal / State retirement.
·
Income
from an insurance policy
·
Trust
income
·
Savings
This money will be taken into account when working out what contribution will be made towards the care home fees.
Everyone has to pay something towards the cost of their care with the exception of people who have been assessed as needing 100% funding from Health, or if the person has been sectioned under Mental Health Act 1983 Section 117.
The money that goes towards care home fees is to pay for the costs of providing personal care, food and accommodation, but not nursing care.
2.
Partly
Self Funded
If the cared for person has savings of between £12,250 and
£20,000 they will be expected to contribute from their capital and income. They
will pay a proportion of the
care home fees. The local authority will make up the rest of the fees to an
agreed amount.
3. Fully
Funded
If the cared for person has £12,250 capital or below, they should not be expected to contribute from their capital. They will however be expected to contribute from their income. The local authority will make up the rest of the fees to an agreed amount.
Further the government says that a person should be allowed £18 –10p ‘personal expenses allowance’ per week for everyday non - care expenses such as toiletries. The local authority will disregard that amount when making the calculation and this money remains with the person.
In real terms, a typical scenario will be the ‘average’ resident will be paying a contribution from their money directly to the care home, or back to the Local Authority. They will have £18-10 left from the state retirement pension to buy extras such as shampoo, hairdressing and trips out.
SUMMARY TABLE
If the cared for person LIMIT
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Has £20,000 + |
Self Funded – the local authority
will not contribute to the cost of care. Attendance Allowance can be
claimed if the person is self – funded and continues to satisfy the
conditions of entitlement. |
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Has between £12,250 and
£20,000 |
Partly Self Funded – financing
from capital and income |
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Has £12,250 capital or below |
Fully Funded – financing
from income only. The local authority will fund the larger part of the fees. |
What if the home you have chosen charges more than
the local authority allows?
You may have
selected a home that charges higher fees than the agreed amounts set by the
local authority. In this case a ‘third party’ would
be required to pay a top up fee to supplement the resident’s contribution. The
third party cannot be the resident. Where the local authority agrees to place
the person you care for in a higher price home on the grounds that there is a
third party willing to contribute towards the higher fee, there are varied ways
in which payment is made. For example some areas have the third party making a
regular payment along with the resident’s fees. In other areas a lump sum
payment made by the third party would be divided by the number of weeks for
which the payment is made.
If the person you care for was a teacher, in the armed forces, or a member of a professional body there are charities such as SAFFAA who may assist with care home fees. DISC can provide a list of charities that maybe able to help with paying for care in some cases.
When would we have to start paying the care home?
The person starts to pay for care from the day/night they move in. They
may pay a reduced amount for the first 12 weeks if they have a house for sale
–this is called the 12 week Disregard. After that period, it is assumed that
capital has been realised from the sale of the property.
If there is no
property involved, an assessment of the person’s contribution should be made
straight away by the local authority. Remember to keep all the pensions saved
up for when the bill comes in. The person’s income will be expected to go
towards fees from that first day.
In some areas, the local authority pays the total care home fees and the person moving in pays the local authority their contribution. In other areas, the care home receives money from the resident and the local authority separately
If the person is not self funding, Attendance Allowance can be paid for
the first four weeks, but will then cease.
What if I am married too or I am the partner of the person going into care what happens to our home?
If the cared for person moves into a care home on a permanent basis, and you are the spouse or partner still living in the home, then the value of the home must be ignored or disregarded by the means test. There are other exceptions (see list below).
If the cared for person's home is occupied by
· A relative of 60 or over
· A relative who is incapacitated
· A child under the age of 16
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A single parent separated or divorced from the
person going into care the value of the
home must be ignored by the means test.
Further CRAG says
"It may be reasonable, for
example, to disregard a dwelling's value when it is the sole residence of
someone who has given up their own home in order to care for the resident, or
someone who is an elderly companion of the resident particularly if the have
given up their own home".
If the cared for person is the sole owner of the property and living alone, its value will be included in the means test. Joint ownerships, houses put in trust etc with children or siblings will require further investigation by the local authority.
What if I have joint bank
account with my spouse?
Under the National Assistance Act 1948, the local authority has no power
to assess a couple according to their joint resources. People entering
residential care should be assessed according to their individual means.
Half of the account, either current or savings, will be calculated as
yours, and half as your spouse’s by the Department of Work and
Pensions and the Local Authority when assessing entitlement to financial
assistance.
Many people have found it advisable to split their accounts into
separate savings accounts immediately to benefit from state assistance as soon
as possible. This is because until your joint savings fall below £40,000
no help is available i.e. ½ of £40,000 =
£20,000 capital limit.
Occupational Pensions, Personal
Pensions or Payment from Retirement Annuity Contracts.
Where the cared
for person has a spouse and is in receipt of occupational pension, personal
pensions or payment from annuity contracts, 50% of the above should be disregarded
from the financial assessment providing the cared for person passes 50% on to
their spouse. Where an unmarried partner
rather than a spouse is involved the local authority should consider its
discretionary powers to vary the Personal Expenses Allowance.
4. Nursing Care Needs
If the person you care for has assessed nursing needs, they will still pay the cost of personal care, food and accommodation, but the nursing cost will be paid for by the NHS through the Primary Care Trust.
If they have been assessed as having 100% nursing needs or if they have been assessed as needing care under Section 117 of the Mental Health Act, the National Health Service will fully fund their care through the Primary Care Trust.
The cared for persons Primary Care Trust is determined by the General Practice they are registered with.
If someone has some nursing care
needs then a proportion of the fees will be paid for by the NHS, This is called
the Registered Nursing Care Contribution (RNCC) and is
described in detail below.
Nursing Care Needs – Health and Social Care Act 2001
Each Primary Care Trust has its own criteria for working out if someone has nursing care needs. They have to follow government guidelines when writing the criteria.
When someone goes into a care home providing nursing care they should be assessed for the Registered Nursing Care Contribution (RNCC) by a nominated NHS nurse. He/she will decide what level of nursing care the person needs. There are three bands of nursing care needs, which are costed as follows:
Low - Minimal registered nursing input. The person’s nursing needs can be met with minimal nurse input. This is likely to be paid to self-funded residents who have chosen to move into a nursing home but care needs could have been met in another setting with support from a district nurse. The RNCC for the low band is currently £40-00 a week
Medium - The person needs at least daily registered nursing input. They may need to have access to a nurse at any time. They may have more than one nursing need, but their condition should be stable, and not in danger of sudden decline. The RNCC for the medium band is currently £77-50 a week
High - The person has complex needs, which require frequent mechanical or therapeutic interventions from a registered nurse and the physical/mental state is unstable. The RNCC for the high band is currently £125- 00 a week.
If someone is in receipt of the high band it is also worth asking the PCT to assess for 100% of the fees to be paid.
All these payments are made directly to the nursing home, not to the resident, some nursing homes pay them back to the carer quarterly, others deduct the amount from the residents – it is worth checking that this is happening.
Who to go to for help
If you have any complaints about an NHS - funded nursing care assessment, you can use the local authority’s complaints procedure which will be available from your local health authority. Your Local Patient Advisory Liaison Service may help you to do this.
What if I disagree with the
level of nursing care that the person you care for has been assessed as
needing?
Ask the nursing home co-ordinator for a review of your case. The nursing home co-ordinator is based at your primary care trust and is responsible for the nurses that carry out assessments. If you are still dissatisfied you can be referred to the Continuing Care Panel for a further review.
DISC can provide a list of organisations that can
support and advise you through this process .
We are constantly looking to improve our
information. It helps if you let us know
whether the information in this fact sheet was / was not useful and if there
are other fact sheets that you would have found helpful that we have not yet
provided.
While the information contained in these fact sheets
is believed to be correct DISC does not accept liability for any error/s it may
contain.