12/05/22
Nearly half a million people in the UK live in a care home or receive social care. 50% of those people are deemed self-funders (paying for their care privately), and the remainder is state-funded.
The current rules are complex and different across England, Northern Ireland, Scotland and Wales.
For those who live in England and Northern Ireland and receive social care:
• If you have capital or assets in excess of £23,250, you will not be entitled to help with the cost of care from your local council.
• If your capital is below the £23,250 threshold, the local authority will pay towards your care fees.
For those who live in Scotland:
• If you have capital totalling more than £28,750, you will not be entitled to funding for care.
• However, if your capital falls below £18,000, you will be eligible for maximum support.
For those who live in Wales:
• If you have capital over £50,000, you may have to pay the total cost of your residential care.
• Your eligible income will determine how much you pay towards for your care.
If you need care, it can be attractive to want to reduce the level of assets you hold so that they fall below the lower threshold. However, disposing of assets to reduce capital held may be classed as a ‘Deprivation.’ This could mean that care will need to be paid for as if the assets were still in your estate.
What happens when you move into a care home?
If you need to move into a care home, a Financial Assessment will be carried out (known as a ‘means test’). The assessment determines what assets you hold and whether the local authority will pay anything towards your care. Earnings, Pensions, Benefits, Savings and Property will all be considered. If a home is included in the Financial Assessment, it will be disregarded for the first 12 weeks that you are in care. Therefore, your care may be state-funded for the first 12 weeks but subsequently paid privately.
Once the assessment has been completed, a local authority will confirm in writing the cost of the care that you need and the amount that you will have to pay. You will always be expected to pay all of your income towards the cost of care, minus a small personal allowance.
If you do not wish to sell your property to pay for this, it is possible to establish a Deferred Payment Agreement. Through this route, care costs can be deferred until a later date. The local authority effectively loans the funds required to pay for care, and they are later repaid using the sale proceeds of the property.
The Government has committed to reforming social care funding with a proposed cap for 2023.
The reform proposes that from 2023, individuals with over £100,000 will be required to fund their social care costs until they have spent £86,000. At this point, the local authority will take over the funding. People will also be required to use their income, and potentially their wealth, to pay for ‘non-care costs’. Typically classed as accommodation and food. However, calculating when the cap kicks in will be complicated and it remains to be seen whether the proposals become effective after previous reforms have been shelved.
Here at CTT, we are dedicated to helping you navigate the complexities of funding caps for adult social care. We can help you challenge financial assessments carried out by local authorities, particularly where assets are owned wholly or in part by a trust and a beneficiary requires care. Get in touch with the team to learn more.
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