Care Home Funding, who will pay?

Residential care can be expensive so it’s essential to understand how it will be financed. Read more here…

Residential care can be expensive so it’s essential to understand how it will be financed

Approximately half of care home residents are self-funded, paying for their care out of their own savings, investments, and property. The other half are funded by the state, through the local authority.

The amount you pay for your care and the state’s contribution will vary depending on where you live in the UK (England, Wales, Scotland, or Northern Ireland) and your financial situation, including the value of your savings, investments, and property

Self Funders

Funded Nursing Care (FNC) or Continuing Healthcare Funding (CHC): These options are available for self-funders in England, Wales, and Northern Ireland. FNC is a flat rate contribution paid by the NHS towards the cost of nursing care. CHC is not means-tested and covers the cost of a person’s care, including personal care, healthcare, and care home accommodation.
Attendance Allowance: This is a benefit for those over 65 years old who need care and support. It is £61.85 per week for help during the day or night and £92.40 per week for those who are terminally ill. It is tax-free and not means-tested. However, it is not available in Scotland, as everyone over the age of 65 in Scotland is entitled to free personal care if assessed as needing it by the local authority.
Paying for care through other means: Some self-funders pay for their care by selling or renting out their home. The proceeds from the sale or rental can be used to invest in a high-interest account, buy a care fee annuity, or pay for care home fees directly.

State funded

State-funded care homes are paid for by the local authority. The local authority will use income such as state or private pensions to help cover the cost of care. However, you will still need a certain amount of money each week for personal expenses, which is called the Personal Expenses Allowance and varies depending on where you live in the UK.

If you want to stay in a care home that is more expensive than the one chosen by the local authority, it may still agree to pay for it, as long as a third party, such as a family member, friend, or charity pays the extra. The extra amount, called a top-up fee, cannot be paid by you as the resident.

To find out if the local authority will contribute to your care home fees, contact them to schedule a free Needs Assessment. The assessment will evaluate your care needs and support required. The local authority will then conduct a Financial Assessment, also known as a means test, to determine if they will pay for some or all of your care costs.

If your capital is below a certain limit, your local authority will pay for some or all of your care home fees. In England, the upper capital limit is £23,250. The capital limits differ across the UK.

Written on the 17th January 2023 by

Lewis Nelson

As the Company Director at Wiserr, I lead an innovative and impactful platform that provides information and advice on care and health services in local areas. We empower informed decisions and enhance the quality of life for thousands of users, and we are featured in over 3000 GP practices across the UK.

Find me on LinkedIn

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