Help with the cost of care

In our previous feature article, we looked at why care homes are so expensive. Usually, this is due to three factors: time, quality, and location. If you have read the previous piece, then hopefully you understand some of the reasons why care is expensive. But understanding doesn’t suddenly stop care from being costly, so now we will look at the ins and outs of what help is available when paying for care home fees.

According to ons.gov.uk, there were estimated to be 360,792 care home residents from 1 March 2021 to 28 Feb 2022 occupying 77.8% of care home beds in England. Of these residents, approximately 125,954 (34.9%) were classified as self-funders, compared to 234,838 (65.1%) state-funded residents.

In our previous article, we established that fees vary significantly based on location within England. If you look at self-funded vs state-funded by region, then the Southeast and Southwest are the highest two regions for proportion of self-funded. Southeast is 44.1% self-funded to 55.9% state-funded, and the Southwest was 40.5% self-funded to 59.5% state-funded.

Looking at specific Local Authorities (LAs), the highest proportion of self-funders is in Sevenoaks (71.7%) in the South East. The lowest proportion of self-funders is in Halton (6.8%) in the North West.

With the split between self and state funded residents varying quite a lot, how is it decided?

Who pays what

Whether you are eligible for funding from your LA depends on both your care needs and how much money you have. The LA may contribute towards or pay all your care costs. A social worker will be assigned to help understand your care needs and then complete a financial assessment. The latter reviews your finances to see how much money you have, looking at capital and income, then at individual needs to determine how much care and support is required. This is known as a means test.

Each country has a capital limit- your home is usually included in the means test unless your partner or spouse still lives there. In England, if your assets amount to more than £23,250, then you will need to pay for some or all your care home fees. Many residents use their home as the way to pay for their care, either by renting it or selling outright.

You may be in the process of selling your home but need to move into care, in this case you can request a 12-week disregard, whereby the LA will make payments towards your care while your house is sold, and if it doesn’t sell within these 12 weeks, you can then request a deferred payment agreement from your council. The LA then pays for your fees until you sell your home or pass away. It is worth mentioning though, that you are only entitled to this if your care needs require residential care AND that your assets are less than £23,250.

If you have certain health needs, the NHS may arrange and fund your care (known as NHS continuing healthcare) – to qualify you must have ongoing physical or mental primary health needs.

Self-funders over the age of 65 who need care and support can also claim Attendance Allowance. For the current 2022/2023 year, this is £61.85 a week, or £92.40 a week if you are terminally ill or need help both night and day. It can still be paid if you are funding yourself in a care home, and is tax free and non-means tested.

If you would like a more expensive care home than that chosen by the LA, they may still agree to pay for it, providing a third party, such as a family member, friend or charity pays the extra. You, as the resident, cannot pay this extra amount, which is often referred to as a top-up fee.

Minimum requirements

It may come as a surprise, but most care home providers have some degree of means testing to establish solvency for prospective residents. As with many financial commitments, care providers typically request evidence of assets to ensure that fees will be viable for x amount of time.

At Hartford Care that ‘x amount of time’ is 24 months. This is around the median for elderly care providers, with some requiring less and some requiring more solvency. This means that privately funded residents need to show evidence of how fees are to be financed; including if funding is to come from the proceeds of a future property sale.

When assessing your assets, your LA will look at things like the value of your home, private and state pensions, savings (and interest earned from those savings), and some benefits.

When discussing care home fees and the amount of money required, it is always recommended that you seek financial advice from a SOLLA (Society of Later Life Advisors) Financial Advisor. We work closely with Eldercare, even collaborating with SOLLA Accredited Adviser Penny Griffiths to help us edit this feature [thanks again Penny!] We suggest using Eldercare as a partner, as they are one of the only financial advise companies who specialise in financial advise for older people and care fees, and will discuss care annuities as an additional option, but also advise you on what benefits may be available.

Do properties in trust avoid fees?

In recent years, companies have been offering to look after properties where ownership and management is transferred to them. The trust company takes a fee, starting at around £4,000, and then manages the sale of the property once the previous owner has moved out or passed away. It is believed that by using this service it is possible to avoid care home fees and to reduce inheritance tax, as the property is no longer legally yours, and won’t be included in a means test.

Unfortunately, this may not always work as the LA could deem the action to be a deliberate deprivation of assets. This means the property will still count towards your capital and the trust will retain ownership of your property.

What about when savings run out?

Nobody knows how long they are going to live, or if needs and circumstances will change. There may come a time when the money has run out. This is often troubling for the next of kin of the resident, as some people are worried that they will have to pay their loved one’s fees. Unless you have signed a contract to agree to pay fees or top-up fees, the next of kin is NOT financially responsible if their loved one cannot pay themselves.

The LA has a duty of care to those who are assessed as having eligible care needs under the Care Act 2014, so legally they must support people who need it, so an up-to-date assessment should be the first thing to do.

The four key criteria that your needs must meet to be considered eligible for support in funding include:

• Your needs or difficulties are because of mental or physical illness or impairment, not other factors.
• There are daily tasks you must do to look after yourself that you cannot perform without at least two of the following:
  • Extreme pain, distress, or anxiety
  • Assistance or prompting
  • Endangering somebody else in your home or care home
• Taking significantly longer to finish the task than is expected
• Being unable to do the tasks you struggle with significantly impacts your wellbeing.

After these assessments, you will know a final amount of available support. If this covers the on-going fees of your current care home, then it is possible to remain in your current location. If the home fees are greater than the support available, then the LA must provide several alternative care home options for the resident to choose between.

How does living in care effect pensions?

What happens to your pension is a common question when moving into a care home. There are three different circumstances which effect if you can still get pension credit.

1. If you pay all your care home fees yourself then you continue to receive your state pension as normal
2. If you receive state-funded care, where your LA is paying some of the costs of your care, then your state pension is counted as income during a financial assessment calculation, including most benefits (such as state pensions.) Your pension is then used to pay towards cost of care home fees, but a set amount is excluded (known as personal expenses allowance (PEA)). In England this is £25.65 a week.
3. Your private pension has similar rules to the state pension, you will still receive it whilst in a care home, and it is considered an asset when calculating financial assessment. If you have a partner still living at home, you can choose to pass on half of your private pension to them to protect from financial hardship and disregard this amount from the financial assessment.

There are also a few other elements to take note of. Some age groups can claim Pension Credit, for this; care home residents are treated as living as if they were at home, and if in a couple where one of you permanently moves in a care home, then you will be treated as a single person.

What Benefits are available while in a care home?

The below benefits can all be paid to you if you live in a care home, but if you can get them and how much you get will depend on your personal circumstances.

Attendance allowance, basic state pension and new state pension, pension credit, Employment and Support Allowance (ESA), Personal Independence Payment (PIP), Disability Living Allowance (DLA), Industrial Injuries Disability Benefit (IIDB), Armed Forces Independence Payment (AFIP), Universal Credit (UC), Bereavement Support Payment (BSP), Statutory Sick Pay (SSP), Energy Bills Support Scheme Alternative Funding (EBSS).

To understand if and how much you can get, please visit this carehome.co.uk article and compare the information to your own circumstance to check your eligibility.

What’s included when living in a care home

The last part of this feature will look into what is included in care home fees. Our next feature will take a typical invoice from one of our care homes and explain cost and services on an item-by-item level. At Hartford Care we’re proud of the service we offer and take a fully transparent approach when it comes to fees and what we provide. Included as standard is accommodation, care staff, food, essential utilities such as heat, electricity, and water, other utilities such as WiFi, and some subscription services, full laundry, and sanitary items. We will be providing a full list of exactly what is provided in our feature next month, so watch this space.