Who pays for care home costs?

Deciding whether a care home is the right choice for your loved one can be a daunting decision. Then there’s also what type of care to consider and which care home to choose. On top of all those decisions, cost will be a factor too. If you or an elderly family member are considering moving into a care home, you may be pondering whether you need to pay for this yourself, or if you may be eligible for some help from the government towards all or some of the cost? Read on for our overview.

When it comes to who pays for your care, the answer will always be – it depends. It will depend on how much money you have and the total value of your assets. Your local council may help you cover some or all the cost depending on the value of your savings and the assets you own (such as your house). However, if you have a capital over a certain amount, the government will expect you to self-fund your care.

Funding support from the local council

If you are eligible for funding support, your local council could pay for some or most of the fees. In this scenario you will need to:

• Find out if you are eligible for help with the cost of your care by applying to your local council.
• If the answer is yes, the council will investigate what care you need by means of a care needs assessment.
• If the result of your care needs assessment concludes you need care in a care home, they will then conduct a means assessment on you whereby they will explore your finances. This will determine if they should help you with the costs and, if so, by how much. Whether you get funding support and how much you receive will largely depend on where you live in the UK and how much capital you have.
• If you are found to be eligible for financial support, your council will calculate the overall cost of your care and will use the means test to decide how much (if at all) you will have to contribute to the overall cost from your personal finances. However, you must be left with a Personal Expenses Allowance (PEA). The PEA must be at least £25.65 per week.

How is my capital means tested for care?

When applying for funding support to help cover your care, your local council will means test your finances to determine how much they should pay towards your care costs. In 2023, here’s how this is calculated:

• If your total capital is worth more than £23,250, you will have to self-fund the entirety of your care fees.
• If your total capital is between £14,250 and £23,250, you are required to contribute towards your care. This will be taken from income included in the means test, such as pensions, plus an assumed or ‘tariff’ income based on your capital between £14,250 and £23,250. The council will subsidise the remaining cost of your care.
• If your total capital is less than £14,250, you will no longer pay a ‘tariff’ income based on your capital, but you must continue paying from income included in the means test. The council will subsidise the remaining cost of your care.

NHS continuing healthcare (CHC)

Residents with long-term health needs can be assessed to see whether they qualify for NHS continuing healthcare (CHC) funding. Eligibility is determined based on a set list of criteria to determine the level of need the patient has. If you qualify for CHC funding then the NHS will help you to arrange a suitable care package that they will fund, which can include paying for a nursing home.

NHS-funded nursing care (FNC)

If you do not meet the criteria for NHS CHC (as above) but require nursing care, the NHS will pay for the nursing element of their care home or nursing home fees. This is called NHS-funded nursing care (NHS FNC). You will still be required to pay for your accommodation and other forms of care, either with local authority funding or self-funding.

When the council assesses your needs, they are required to refer you to the NHS if you may be eligible for NHS CHC. 

Do people with dementia have to pay care home fees?

Generally speaking, people living with dementia will be expected to pay towards their residential care costs, either by themselves or with help from their local authority (depending on their savings and assets determined in their means assessment). A person with dementia may be eligible for NHS continuing healthcare. It is important to note that a dementia diagnosis does not automatically make a person qualify, as it depends on the severity and complexity of their ongoing health needs. Even if they are not eligible for NHS continuing healthcare, a person with dementia who lives in a nursing home could meet the criteria for NHS-funded nursing care.

At the Future Care Group, we are committed to making your transition into residential/nursing care as seamless as possible, and this includes the process of paying for your care fees. There are lots of options available for covering your fees and we would be delighted to chat through them with you. While we are not permitted to give you direct financial advice, we will happily talk you through the options available to you and provide you with the necessary details of organisations that can offer bespoke advice, as and when you require it.