Paying for residential care
If you need to move to a care home, you'll be given a financial assessment to work out how much you need to pay yourself, and what your local council (or, in Northern Ireland, health and social care trust) will pay to make up the difference.
The rules about payment are complex, but it helps to know about the topics below.
Find out about:
Each of the four countries within the UK has its own system for assessing whether you can have help with fees. An assessment will consider things like:
- your weekly income
- your savings and investments
- whether you’re a home owner
- whether you live with a partner
Each part of the UK has its own limits on how much capital you can have and still get help with fees. Each country has an upper limit above which you have to pay the full costs of your care home. If you're between the lower and upper limits, you'll be expected to pay part of the costs. If you're under the limit, all your fees will be paid for you. Any income you have may also affect how much you might be expected to pay.
Our booklet Residential care and your options has more information.
Before making any financial arrangements, it can help to seek advice from a financial adviser.
Help from local council
If you're eligible for local council help with payments:
- Local councils (or, in Northern Ireland, health and social care trusts) set a rate that they will pay for residential care. If the home you want to move to costs more than the local council is prepared to pay, you may still be able to move there.
- The local council (or trust) must show that the amount it would usually pay is enough to cover the level of service you require.
- They can only refuse to pay more than their usual rate if they can prove that there is another home (within their rate) which meets all of your needs.
- Your needs can include considerations such as location, and religious and cultural requirements.
- If there is no other home that meets all your assessed needs, they must then agree to pay any extra cost to ensure you have the proper care you need.
Read more in our booklet Residential care and your options.
Top up payments
If your local council (or trust) can prove that there is another home that would meet your needs, and you have someone else who is willing to pay the difference, you could still move to the home of your choice.
This is known as a ‘third party top-up’.
NHS continuing healthcare
Continuing healthcare (CHC) is sometimes known as fully funded NHS care. It's care outside of hospital that's arranged and funded by the NHS. It's only available if you have a complex medical condition, needing a high level of care that's primarily health care (rather than social care).
It can provide funding and services at home to help with personal care, such as dressing and bathing. Or it can pay for you to live in a care home with nursing.
The rules on eligibility are quite complicated and change regularly. It's awarded to people who have ‘complex ongoing healthcare needs’, rather than social or personal needs. It also depends on where you live.
In Scotland continuing health care was replaced in 2015 by Hospital Based Complex Clinical Care. There you'll be assessed on the answer to 'Can your care needs be properly in anywhere other than a hospital?' If the answer's yes, you'll be discharged from NHS care into:
- your own home with support
- a care home
- or supported accommodation
If you're in England, Wales or Northern Ireland, find full details of what continuing healthcare covers and how to apply by visiting the NHS Choices page on continuing healthcare.
As of April 2014, if you're in England and receiving NHS continuing healthcare, you can ask for a personal health budget so that you can have more choice in how that care is provided. Find out more about personal health budgets on NHS Choices.
Giving away assets
Many people who think they'll need to pay care fees in the future wonder whether it's worth giving away their assets, including their home, to reduce their capital. If the home is ultimately intended to go to children via inheritance for example, you may think, ‘Why not?’
Local councils are sensitive to this strategy and will view it as ‘deprivation of assets’ – deliberately trying to avoid paying. If it decides this is what you have done, you would be means tested as if you still had those assets. Before making any such arrangements, you may wish to seek legal advice.
Deferred payment agreements
If you need to pay for care home costs, you can ask your local council for a deferred payment agreement. If you're eligible, your council will pay any care home fees on your behalf, up to the value of your house. You can delay paying the money back until after your death, or until you choose to sell your home.
If you live in Northern Ireland some health and social care trusts might also offer differred payments in some cases.
It can be helpful to review what benefits you and your family members or carers are receiving. If you're eligible for a benefit, the local council will assume you're receiving it when they calculate how much you should pay toward your care, even if you don't actually claim it. So it's worth making sure that you're getting all the benefits you're eligible for.
Some benefits you may receive, such as Personal Independence Payment, will stop when you go into residential care.
Even if you think you are getting what you're entitled to, it may well be worth completing an annual check.
Organising your finances
The biggest worry for many people needing to pay care home fees is not the weekly cost, but the uncertainty of not knowing how long the costs will need to be met.
There are a number of financial products that can help you cope with fees on an ongoing basis:
- Immediate care annuity - You pay a single lump sum and in return a fixed sum of money is paid towards your care costs for the rest of your life
- Equity release - refers to ways in which you can raise money against the value of your home. There’s information about equity release on the Money Advice Service website.
- Investment plans – you put some money into a fund with the aim of making a profit. This money can then be used to pay for your care when it is needed.
You should always seek expert advice about which products are best suited to you.
Our booklet Residential care and your options has more information.
If you're aged 65 or over, have personal care needs which need to be met in a care home, and are funding your own care, then your local council can pay toward your personal care needs.
You will be expected to cover the rest of the costs of the care home, which will be the accommodation fees. In order to work out whether you can afford to pay these, you will need to have a financial assessment carried out by your local council social work department.
If you have been assessed as being eligible for the highest band of help for nursing care costs, you may wish to check if you are entitled to further help from Hospital Based Complex Clinical Care (which has replaced Continuing Health Care).
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