FAQs: Care Home Fees Funding

1. How much can you keep before paying for care?
2. What assets can be taken to pay for care?
3. What assets are exempt from care home fees?
4. What is the 7 year rule for care home fees?
5. Do they make you sell your house to pay for care?
6. How can I avoid losing my house to pay for care?
7. Do I avoid paying for care by giving away my assets?
8. How can I avoid selling my parents’ home to pay for care?
9. Can my parents pay me to care for them?
10. Your savings are less than £23,250, will Social Services pay your care fees in full?
11. Social Services told me that you have to pay your wife’s care home fees. Is this right?
12. Social Services say you are a “self funder”. What does this mean?
13. You are going into permanent care and have been assessed as a “self-funder”. When do you start having to pay?
14. Social Services told you that you have to sell your home to pay for your care. Is this right?
15. Can you avoid Care Home fees in the future by gifting your house to your adult children?
16. You are going into care and your home is occupied by another relative. Do you have to sell?
17. You have been in hospital and want to go home but you need to recuperate in a care home for up to 6 months. Do you need to sell your home?
18. You have been told you are going into interim care for 6 weeks. Do you have to pay?
19. Social Services told you to cash in your Life Assurance Policy to pay for your care, but your Financial Adviser said it was protected. Who is right?
20. You thought the NHS paid for all of your care, so why are you being asked to pay care fees?
21. You are eligible for NHS Continuing Healthcare – can you stay in your own home?
22. What is NHS Funded Nursing Care?

How much can you keep before paying for care?

If you have assessable capital or savings worth more than £23,250, you will not be entitled to help with the cost of care from your local authority. If you own a property, this may affect your eligibility for care funding if you are moving into a care home on a long-term basis, although this will depend on the situation. It can be valuable to consult an expert Paying for Care solicitor to discuss what care funding you are entitled to receive.

What assets can be taken to pay for care?

If you require social care, whether this is at home or in a care home, you may be required to pay some or all of the costs if your savings or assessable capital are above a certain level (currently £23,250 in England).

What assets are exempt from care home fees?

If a person moves into a care home, the fact that they own a property may be taken into account when establishing whether they are eligible to pay care home fees. However, if the person jointly owns a property with someone else, and the other person is still living in the property, this means that the jointly-owned property must be disregarded for the purposes of assessing eligibility for the payment of care fees. This is known as a mandatory disregard. Where the property is not jointly owned, but is occupied by a “qualifying relative” who continues to live there after the person moves to a care home, a property disregard might apply so that the property does not need to be used to pat the care home fees.

Some other assets, such as personal possessions, may be exempt from care home fees although this may depend on whether they were purchased with the intention of deliberately reducing a person’s capital. An expert Community Care law solicitor can advise on which assets and capital do not need to be counted in a care fee assessment.

What is the 7 year rule for care home fees?

A frequent misconception around paying for care is that deprivation of assets rules will not apply to any capital someone gives away more than seven years ago. However, there is no such rule around paying for care – a local authority can look back as far as they like when establishing whether someone has deliberately deprived themselves of assets.

It is likely that this misconception comes from the law around inheritance tax gifting, which does have a “seven year rule”. The laws around inheritance tax and paying for care are very different and should not be confused.

Do they make you sell your house to pay for care?

If someone is moving into a care home, there are circumstances when the value of their former home is taken into account when considering whether they are eligible for social services funding to help with their care fees. This does not apply if the person’s former home qualifies for a property disregard, because it is occupied by a qualifying relative (who may or may not  jointly own the property).

Even if the value of a property is taken into account when establishing care costs, this does not mean that someone has to sell their house in order to pay care home fees, nor that they necessarily should. Our Social Care solicitors will be able to advise as to the best steps to take when undergoing a local authority financial assessment that takes into account the value of a property.

How can I avoid losing my house to pay for care?

If a home is included in the social care means test to establish eligibility for care fees, you may be able to delay selling it by entering into a Deferred Payment Agreement with the local authority. This would allow someone to continue to own their property whilst the council provides financial support on a loan basis, although this financial support will then be repaid from the property at a later date.

Do I avoid paying for care by giving away my assets?

The rules around giving away assets to avoid care fees are complicated. When a local authority assesses a person as needing social care, they will carry out a financial assessment (known as a means test) to calculate how much they should pay towards their care fees.

Intentionally reducing your assets so they won’t be included when the council carries out a means test can be considered deliberate deprivation of assets. If the council thinks that you have deliberately reduced your assets to avoid paying care fees, they may include the value of the assets you no longer own when the means test is carried out. This may depend on whether you knew at the time you gave away the assets that you needed or may need care and support, and that avoiding paying for care was a significant reason for giving the assets away.

The rules around deprivation of assets can be complicated and it can be valuable to consult an expert social care solicitor before taking any decisions about giving away assets or property.

How can I avoid selling my parents’ home to pay for care?

If someone moves permanently into a care home, the value of their property may be taken into account when assessing their eligibility for care fees, unless the house is still occupied by their partner, a relative who is aged 60 or over, a disabled relative, or a child of the person who is aged under 18.

If your parents’ home is likely to be included in the means test when assessing their eligibility for care fees, you may be able to delay selling the property by entering into a deferred payment agreement (DPA) where the council provide financial support for care costs, on the condition that these costs are repaid from the property or estate at a later date.

Can my parents pay me to care for them?

There are many situations where people give up work or reduce the amount of work they do in order to care for a family member. There are situations where they can be paid for the care work they do.

When a person has mental capacity, they are free to do what they wish with their money, although the amount they pay for care must be affordable, sustainable and reasonable in terms of the care they receive. Both parties should enter into a written agreement that states the terms under which the care is delivered.

When a person does not have mental capacity, the situation becomes more complicated. A family member deputy or attorney can usually only pay themselves or another family member for care once a Court of Protection order has been obtained, and after any conflict of interest between the person receiving the care and the relative has been addressed.  These arrangements are known as Family Care Payments and it is vital to take advice to make sure that the rules and guidance are followed.

Your savings are less than £23,250, will Social Services pay your care fees in full?

No, the rules surrounding social care funding are not that simple. If you are assessed by Social Services as having social care needs (not a primary healthcare need) you will be expected to pay towards your care home fees or your care at home.

Some of the rules differ depending on where you are receiving care. Social Services will not fully fund your care unless you fall within a certain category, for example, you are someone who is eligible for Section 117 aftercare funding. Most people who qualify for local authority funding for care costs have to pay a contribution from their income. For help challenging an inaccurate social care financial assessment by Social Services, our specialist community care team can help. Contact us to find out more.

Social Services told me that you have to pay your wife’s care home fees. Is this right?

No. It is the income and assets of the person in care that are assessed during a financial assessment. Income includes their state pension and benefits, occupational and private pensions, and other income.

The partner’s income should be ignored by the financial assessment. Rules regarding income disregards can also be helpful to a couple when the person in care has a private or occupational pension. The situation can be complicated when household income is received on a joint basis, such as Pension Credit.

We can help ensure that Social Services have properly assessed your wife’s income contribution to her care home fees.

Social Services say you are a “self funder”. What does this mean?

The paying for care rules are complex, but put simply, if your assessable savings and capital are more than £23,250 (England: there are different social care funding rules in Wales) you are expected to fund your care costs in full until those assets fall below that level.

Your assessable savings may include your property, although social care property disregards are available in some situations. For help challenging an inaccurate social care financial assessment by Social Services, our specialist community care team can help.

You are going into permanent care and have been assessed as a “self-funder”. When do you start having to pay?

This will depend upon how much capital you have, whether capital is property, savings, or investments, etc., and whether your property can be disregarded. If you own a property that is not occupied by a qualifying relative, the value of your home may be disregarded for up to 12 weeks, depending on the circumstances.

If your assessable capital apart from your home exceeds £23,250, you will normally have to self-fund as soon as you move into the care home.

Social Services told you that you have to sell your home to pay for your care. Is this right?

Many people are concerned that their home will have to be sold to pay care home fees and there will be nothing left for their family to inherit. There are complex rules regarding the assessment of the home, whether its value can be fully disregarded and/or whether you can borrow against the home so that you do not have to sell it.

Deferred Payment Agreements (DPA) offer an alternative. A DPA is a loan funding agreement with Social Services which allows you to “borrow” against the value of the family home instead of selling it. Social Services contribute towards your care home fees and apply a Legal Charge against the property which needs to be paid back when the person in care dies, or when the property is sold, whichever is the sooner.

We can help you navigate these rules and plan for your and your family’s future.

Can you avoid Care Home fees in the future by gifting your house to your adult children?

Many people consider gifting their savings or their home to a family member to avoid the risk of having to sell their home at a later date to pay for care fees. However, the paying for care rules make it clear that giving away assets, such as capital or signing over your house to someone else, may be considered an intentional “deprivation” of assets.

The Local Authority may treat you as if you still owned the asset even after you have given it away and you may be liable for all of your care fees as well as no longer owning the asset. This is a complex matter and you should always seek legal advice before contemplating any gifting.

You are going into care and your home is occupied by another relative. Do you have to sell?

It depends on who lives in the property, how old they are, whether they have a disability, whether they are dependent on you, whether they have been caring for you and possibly also how long they have been living there.

Please contact our Community Care Law Team for advice, as families and Social Services can both get the law about social care property disregards wrong.

You have been in hospital and want to go home but need to recuperate in a care home for up to 6 months. Do you need to sell your home?

The value of the home MUST be ignored if the stay in care is “temporary” and the resident intends to return to it or to sell it and buy a more appropriate property. Temporary stays can be up to 52 weeks or longer.

You may need legal advice if Social Services regard the care placement as permanent when you still have a realistic opportunity of leaving the care home and returning home.

You have been told you are going into interim care for 6 weeks. Do you have to pay?

It depends upon the nature and purpose of the short-term care package being arranged. Health & Social Services should confirm whether this is “temporary care” or “Intermediate Care” as the funding rules differ.

No charge should be made for a package of Intermediate Care, but you may not qualify for this particular source of help because there are other criteria.

If in doubt, seek advice. The value of your home should be disregarded in any short term or temporary residential care package.

Social Services told you to cash in your Life Assurance Policy to pay for your care, but your Financial Adviser said it was protected. Who is right?

The surrender value of a life insurance policy, endowment policies and some Investment Bonds should normally be disregarded (ignored) by Social Services. This may depend upon when and why you bought the policy. Social Services may dispute whether a policy is a life policy so get specialist legal advice before you cash in the investments.

You thought the NHS paid for all of your care, so why are you being asked to pay care fees?

People are shocked to find out that the NHS does not automatically cover care home fees, or care at home fees, even when they have a serious medical condition such as dementia or Parkinson’s, or after a stroke.

The NHS only has a legal duty to fully fund care costs if the individual has a primary healthcare need. It can be difficult to persuade the NHS that you or your relative has a primary healthcare need and should qualify for NHS Continuing Healthcare and the number of people who do qualify is a small proportion of the population who require care and support at home or in a care placement.

Our Community Care Law Team can provide advice on potential eligibility for this source of funding.

You are eligible for NHS Continuing Healthcare and want to stay in your own home. Can you?

Care at home costs can be paid by NHS Continuing Healthcare but the package of funding offered may not cover the true cost of the care at home package. The NHS may say it is too risky to have care at home, or the NHS may tell you that you cannot top up the NHS funding offer, and try to persuade you to agree to a Nursing or Care Home instead.

If your local NHS Integrated Care Board (“ICB”) impose a cap or ceiling  that limits the amount that they will pay for your care at home to about the amount they would pay for you in a care home, this may be unlawful: contact our specialist Community Care lawyers for advice.

What is NHS Funded Nursing Care?

This is a small payment from the NHS towards the cost of care in a Nursing Home or a Care Home registered for nursing. Funded Nursing Care (FNC) is currently £209.19 per week (2023/24).

However, not all care homes pass on the benefit of this payment and will depend on the contractual terms agreed with the care home. See our summary page for an explanation and for further guidance and care home contract terms advice.

To speak to an expert Community Care lawyer about paying for care or deprivation of assets rules, contact us today on 01273 609911, or email info@ms-solicitors.co.uk.