Assessment

Before you can get help with funding a place in a care home, you must have your needs assessed by your local council. This care assessment is about the care you need and is not based on your finances.

When a local council assesses your needs it will be using its own rules to decide who qualifies for a care home place. Each local council can consider how much money it has available in its budget when deciding how strict those rules will be. You can ask to have a written copy of these rules; they are often referred to as ‘eligibility criteria’.

If the local council decides that you do not meet its criteria for a place in a care home it is not obliged to fund you, regardless of how much or how little money you have. But it must then consider whether it has to offer you help at home (see our free leaflet Help in Your Home for more information). If you disagree with your local council’s decision you can use the local council complaints procedure – see the section on complaints for more information on this.

If the local council decides that you do meet their needs criteria, they will carry out a financial assessment to decide on how your care home fees will be paid:

• If the local council assesses your finances and decides that you can pay the full fees, they will probably give you a list of suitable homes in the area and will expect you to arrange your own place. However, if you are not able to manage the process of finding a home (for example, because you are too frail), or if you don't have someone who can help you, the local council must arrange a place for you. You will still have to pay the full fee.
• If the local council decides that they will be paying towards your place in a home, they should tell you the amount that they will pay and give you details of homes in the area that are within their price range. The limit that they set should be realistic. If you are unable to find a home to meet your needs within the local council's price limit, then they should increase their limit. If the local council won't increase this limit, you may need to use the local council complaints procedure - see Complaints.

For more information on working out how much of your care home fees you will have to pay yourself, see the section below on Paying for a place in a care home.

Non-means-tested help
If you are assessed as needing nursing care you will get help with the costs of your nursing care in a care home, regardless of your finances. In Scotland, you will also get help with the costs of your personal care in a care home. This means that if you are paying all or part of your care home fees, you could see a reduction in the amount you have to pay. See Help with nursing care costs (and personal care in Scotland) for a more detailed explanation of the different systems in England and Wales, Scotland and Northern Ireland. Some people should get all their care funded by the NHS. See Fully funded NHS care.

Your care assessment plays a major role in the funding process. For more detailed information on what to expect and things to think about before having the assessment, see our advice leaflet Help in Your Home.

Choice of home

Even if the local council is funding you, this does not mean that they decide which home you go into. Government guidance to local council states that you can choose any home as long as:

• your chosen home has a place available; and
• it meets your assessed needs; and
• it will not cost the local council more than they would usually expect to pay for someone with your assessed needs (although it may be possible for someone else to top up your fees, see Who else is responsible for paying?); and
• the home is willing to contract with the local council under their terms and conditions.

The local council cannot set an arbitrary limit on the amount they are prepared to pay for a place in a care home. They must consider each case separately, taking into account all your assesed needs. For example, if you have dementia, you may be assessed as needing a specialised care programme; or if you do not speak English, you may be assessed as needing a home where staff can communicate with you in your own language. If the only homes which can provide these services are more expensive, the local council should cover the additional cost.

If the only home available to meet your assessed needs is more expensive than your local council would normally pay, the local council should meet the extra cost.

If you receive funding from your local council, they should continue to fund you up to their usual limit even if you move to a home outside their area. This can be difficult for people who want to move to a more expensive area. The only way that a local council would be legally obliged to pay more than their usual limit for you to move to a more expensive area, would be if the move was recommended as part of your assessment. For instance, it may have been part of your assessment that one of your psychological needs is to be close to your family.

If you want to move between Scotland and England or Wales, or vice versa, your local council should be able to make special arrangements with the council that you wish to move to. But you will be assessed under the funding rules for the country and local council that you are moving from. If you are in Northern Ireland you can move to a care home in England, Wales or Scotland, but it is complicated.

Paying for a place in a care home

The cost of a place in a care home will vary depending on where it is and the services and facilities it offers. In local council homes, the local council is legally obliged to set a fee based on the actual cost of running the home. In private homes, fees are set by the home owner, while fees in voluntary homes are set by the voluntary organisation.

If your local council has agreed that you need to move into a care home, and you are getting local council funding, they are responsible for paying the fees directly to the home. If you are contributing part of the fees, you will have to refund this amount to the local council. This means that usually you will not be paying anything directly to the home. However, if you prefer to pay your share of the fees directly to the home, this can be arranged as long as you, the person managing the home, and the local council all agree to this.

The rules for working out how much of the fee you will pay yourself are based on two things: your savings and capital and your income (the money you have coming in each week).

When assessing your capital and income the local council should only look at your income and capital, not that of your partner or any other relative. Even if you live with your partner in the same care home, you must be assessed separately and the income and savings rules will apply to you as individuals not as a couple. However, under separate rules your spouse may be asked to make a contribution to the cost of your care – see Who else is responsible for paying?

Rules on savings and capital

The savings limits in England, Wales and Northern Ireland usually go up every April. The current savings limits for each country are as follows:

Upper Savings limits in the UK

Upper limits
England and Northern Ireland	£22,250
Wales	£22,000
Scotland	£21,500
Lower limits
England and Northern Ireland	£13,500
Wales	£19,000
Scotland	£13,000

If you have more than the upper limit in capital (includes savings, stocks and shares, and property) you will be expected to refund the full cost of the fees. You will not be eligible to receive financial help from your local council until your savings are reduced to the upper limit.

If you have less than the upper savings limit, or when your savings drop to this level, then the local council will asess your ability to pay for your care by looking at both your capital and your income.

Your property

If you own your own home, its value will usually be counted as capital. However, there are some important exceptions to this rule:

• Your property should be disregarded for the first 12 weeks after you enter into care permanently.
• If your husband, wife or civil partner (or unmarried partner) lives in your home, then its value will not be counted as capital in the assessment.
• If a relative aged 60 or over lives in your home, then its value will be ignored.
• If a relative under the age of 60 who is incapacitated lives there, then again the value will not be counted. (In general, someone could be judged to be incapacitated if they are receiving a sickness or disability benefit such as Incapacity Benefit or Disability Living Allowance.)
• If your home is occupied by your estranged or divorced partner and he or she is a lone parent with a dependent child, its value will be ignored.
• The value of your property should be ignored if you are liable to maintain a child under 16 and your house is the child’s main home. The child must be either a relative of yours or a relative of a member of your family.
• The local council is also allowed to ignore the value of your property if it is the permanent home of someone who does not fall under these categories – for example, your carer. The local council is not obliged to do this, but can choose to use its discretion.
• If you are a temporary resident in a care home the local council should ignore the value of your home. You can be classed as temporary for up to 52 weeks, possibly longer at the discretion of the local council. See Temporary Residents for more information.

If you jointly own your home with someone who does not fit into any of these categories, for example a relative under the age of 60 or a friend, then things are more complex. In this situation, the local council will give a value to your interest in the property. This value depends largely on the price that your share of the property could realistically command from a willing buyer.

However, if your co-owner is unwilling or unable to buy your share from you, then your interest in the property could be held to be worth nothing. This is because it is very unlikely that an outsider would want to buy into a property when this would involve sharing it with someone else. If you disagree with how your share has been valued you can get a professional valuation and challenge the local council decision.

Deferred payments

The local council cannot force you to sell your home, but if you are unable to cover your care home fees the money you owe your local council will mount up. However, the local council can allow you to defer part of your contribution if you are unable or unwilling to sell your home and you don't have enough income or other assets to cover your full fees. The local council will effectively be giving you an interest-free loan. This will be paid back when your property is eventually sold, or when your estate is wound up.

This is called a 'deferred payments agreement' and may involve having a legal charge placed on your property. The amount of money you owe will start to incur interest 56 days after your death or the date your terminate the agreement. The local council may ask you to cover the legal costs involved in placing a charge on your property, such as land registry searches. These have to be paid up front and will not be added to your deferred payments.

Although the part of your contribution that is based on the value of your property can be deferred, you will still have to contribute any other income and assets you have towards the cost of your place in a care home.

In certain circumstances the local council may refuse to enter into a deferred payments agreement, in which case they must put their reasons in writing and you can complain about the decision. See Complaints for information on complaining to your local council.

You might find it more difficult to get a deferred payments agreement if you live in Northern Ireland. Your health and social services board can ask you to seek interim funding elsewhere, for example from a financial organisation, but they cannot make you do so.

Spouse's main home

If your home is disregarded because your spouse or civil partner is living in it, there may come a time when they wish to sell the property and buy another; maybe because they want a smaller property or want to live in sheltered housing. If this happens your spouse can use all the capital in the property to purchase another one, including your share of the capital. However, if there is any capital left over, your share will be taken into account as savings.

Less than the upper savings limit in savings

If you have less than the upper savings limit, the local council will assess your income and savings to decide how much you should pay towards your care home fees.

• Savings below the lower savings limit are ignored altogether.
• Savings between the lower and upper savings limits are converted into an assumed weekly income using a simple formula. This is often called tariff income. For every £250, or part of £250, you have over the lower savings limit, £1 a week will be added to your income.

For example, if you have £14,800 in the bank, then your weekly tariff income is set at:

• £10 in England and Northern Ireland, because £1 is added for every £250 you have over £13,500.
• £12 in Scotland, because £1 is added for every £250 you have over £13,000.
• £0 in Wales, because £1 is added for every £250 you have over £19,000.

Savings in the bank are just one form of capital; other things that are taken into account are stocks and shares, building society accounts, premium bonds, National Savings Certificates, and property (both buildings and land). If you hold savings jointly with someone else, then only your share will be taken into account. It will be assumed that your share is 50 per cent, regardless of what your actual share might be.

Local councils are not allowed to set their own capital limits for funding. For example, a local council might say they will only fund people with capital below £5,000; this is illegal. Our information sheet How to Make a Complaint gives details of how you can challenge the local council if you find yourself in this position. Our free advice line SeniorLine can advise on this issue.

Income

The local council works out your income by calculating the money you have coming in each week. This includes tariff income you have from savings, any pension you receive (whether State Retirement Pension or an occupational or personal pension) and money you get from state benefits, such as Pension Credit.

However, some income is disregarded (that is, ignored) by the local council when it is assessing your income. A few benefits, including the mobility component of Disability Living Allowance and War Widows Special Payments, are completely disregarded. Others, including War Disablement Pension and War Widow’s Pension are partly disregarded, up to a total of £10 per week.

Half of any occupational or personal pension you receive will also be disregarded by the local council, as long as at least half of this pension is passed on to your wife, husband, or civil partner who is still living at home. (Even if you pass on more than half your pension, the local council will only disregard half of it.) This disregard applies to occupational pensions, personal pensions and payments from a retirement annuity contract. If you are an unmarried couple you will not qualify for this disregard, but the local council might use its discretion to increase your personal expenses allowance – see 'Your contribution' for information on this.

If your partner or spouse is claiming means-tested benefits such as Pension Credit, Housing Benefit or Council Tax Benefit, this income will affect their benefits and they could end up worse off. For advice on this, contact our free advice service SeniorLine on 0808 800 6565 (0808 808 7575 in Northern Ireland).

Although Pension Credit is taken into account when you are being assessed, up to £5.45 of any savings credit you get will be ignored. This is called the savings disregard. If you are a couple, up to £8.15 will be disregarded. If you don’t get any savings credit because you have too much extra income, you will get the full savings disregard. The savings disregard will be added to your personal expenses allowance – see 'Your Contribution'.

Pension Credit

You can continue (or start) to claim Pension Credit when you move to a care home. Pension Credit tops up your weekly income to at least £124.05 if you are single (if one member of a couple is permanently in a care home they are treated as single), or £189.35 between you if you are a couple.

When the Department for Work and Pensions (DWP) is working out how much Pension Credit you should get, it looks at your weekly income. As well as the money you have coming in, such as your pension, it assumes that you get a weekly tariff income from your savings and adds this amount on. To work out your tariff income the Department for Work and Pensions will apply a different formula from the local council. It will assume £1 of income for every £500 of capital you have above £10,000. Savings below £10,000 are ignored. (If you are a temporary resident, only savings below £6,000 are ignored.)

For example, Stan, aged 73, is a single pensioner living in a private care home and not receiving any disability benefits. His only income is his basic State Retirement Pension of £90.70. His savings are £5,800, which is below the £10,000 limit, so they are ignored. Therefore, Stan will be entitled to a Pension Credit payment of £33.35 to top up his income to £124.05.

Pension Credit is counted as income when your local council is working out how much you should pay towards your care home fees (apart from the savings disregard – see 'Income'). So your local council will want to make sure that you are claiming Pension Credit if you are entitled to it. This is because it will mean that it has to contribute less towards your fees, saving your council money.

Disability benefits

If you are receiving Attendance Allowance or Disability Living Allowance (care component) when you move into a care home and the local council is contributing to the cost of your fees, your Attendance Allowance or Disability Living Allowance (care component) will be stopped after four weeks. Your Disability Living Allowance (mobility component) is not affected when you move into a care home and you will continue to receive it.

However, if you are getting Attendance Allowance or Disability Living Allowance (care component) when you move into a care home and you are paying the full cost of your place yourself, without help from the local council, you will continue to get your benefit. You can also claim Pension Credit without it affecting your Attendance Allowance or Disability Living Allowance.

If you are getting help from the local council to pay your fees under a deferred payments arrangement, but you will pay the local council back once you have sold your property, you can continue to claim Attendance Allowance or Disability Living Allowance (care component).

In Scotland, if you are claiming Attendance Allowance or Disability Living Allowance (care component) and getting help from the local council to pay for your personal care, your benefit will stop after four weeks.

If you would like more advice on how your benefits will be affected when you move into a care home, contact our free advice service SeniorLine on 0808 800 6565 (0808 808 7575 in Northern Ireland).

Temporary residents

If you are in a care home for a temporary stay, the local council is not obliged to do a full means test for the first eight weeks. It just has to charge a reasonable amount.

If it does a full means test it can’t include the value of your home as capital. It also has to take into account liabilities that you still have for maintaining your home, such as standing charges for utilities, house insurance and Council Tax. If it does not allow you enough to cover these costs, you should use the local council complaints procedure – see 'Making a Complaint'.

It should also ignore any benefits that you receive towards your housing costs such as Housing Benefit or any amount towards housing costs you receive as part of Pension Credit. In addition, it should ignore any Attendance Allowance or Disability Living Allowance you receive.

If you are a single temporary resident, the rules for Pension Credit are the same as if you were still living in your own home. However, if you are a member of a couple and you go into a care home on a temporary basis, you will still be treated as a couple for Pension Credit. When working out how much you have to pay towards the cost of your care, the local council has to leave the person still at home with enough to live on. If you are in this position, you should get some advice from an advice service such as SeniorLine on 0808 800 6565 (0808 808 7575 in Northern Ireland).

Temporary absences from the home

It is up to the local council whether it will continue to fund your place in a care home if you are absent: for example, if you go into hospital. You should check your local council’s policy on this before you go into care.