Alzheimer's Society

Under the NHS and Community Care Act 1990, local authority social services departments have a duty to carry out assessments for people who may be in need of certain services. If an assessment concludes that services are required, these must be provided. These services may include aids and adaptations to the home, meals on wheels, home care, respite schemes, day care, and residential and nursing care.

The financial assessment

If someone with dementia or their carer feels that they need help from social services, they can ask to have their needs assessed (see Factsheet 418, Community care assessment). They will then undergo a financial assessment, to work out how much money they should pay. Carers and people with dementia often feel that their privacy is being invaded when a person from social services visits them at home and asks questions about their finances. This is understandable. However, the assessment is important, as anyone who refuses to share such information may automatically have to pay for any services provided by the local authority.

Some financial assessment forms include a space for the partner of the person with dementia to include their own financial information, but this does not have to be completed. The local authority should only assess the person who needs the service, and no other family member has to contribute. Any joint accounts, investments or savings should be divided, and only the share belonging to the person with dementia should be included on the form.

The person conducting the financial assessment interview will be able to answer any questions. Alternatively, the finance department of the local authority can provide an explanation of the charges.

How much should the local authority contribute to home care?

Most local authorities charge for home care, and for services such as meals on wheels. The government's 'fairer charging' guidance states that each authority can decide its own charges. However, charges must be 'reasonable', and anyone who feels that they are excessive has a right to complain.

The local authority will ask anyone with savings over a certain limit to pay all of their home care costs. If a person with dementia is paying for services themselves, the local authority should carry out regular reviews. Once a person's savings drop to below the savings limit, the charge should be reduced, as it is with residential care. Once savings have dropped below a certain level, they should not be used to pay for home care. (See Factsheet 431, Benefits rates and income/savings thresholds.)

Guidance on fairer charging suggests that people should not be expected to live on an income lower than that of people receiving income support or jobseekers allowance. This level of income is called the 'basic level'. Anybody whose income is at the basic level should not be charged for home care. Individual local authorities can decide whether or not to count severe disability premium, disability living allowance or attendance allowance as income.

If someone refuses to pay for home care, social services cannot withdraw the service. The social services department has a legal duty to care for vulnerable adults and meet their needs. It must continue to meet the needs of the service user while sorting out the financial situation.

How much should the local authority contribute to residential care?

If a person has been assessed as fulfilling NHS continuing health care criteria, the local primary care trust will pay for all of their care (for further details, see When does the NHS pay for care? (published by Alzheimer's Society, 2004). The primary care trust will also fund all of a person's care if they have been admitted under a Section 3 of the Mental Health Act 2007 at any time. An application under Section 3 gives authority for someone to be detained in hospital for treatment. On discharge, further to Section 117 of the Mental Health Act 2007, the person will be entitled to free aftercare for as long as necessary.

When a resident's savings fall below a set limit, the local authority will pay for all of their care. However, they will take their attendance allowance or disability living allowance, if they receive either of these benefits, along with their state pension, leaving them with 'pocket money'. In this case, if the resident has an occupational pension and a partner, half of their occupational pension will also go towards their care and their partner will receive the other half. For more details, see Factsheet 431, Benefits rates and income/savings thresholds.

The local authority will part-fund a resident's care, on a sliding scale, if they have savings above the lower limit but below the upper limit. Again, it will take any attendance allowance, disability living allowance and state pension, leaving the person with pocket money.

If the resident has savings over a set limit, he or she will have to fund all of their care themselves. However, they will still get their pension and their attendance allowance or disability living allowance, and they can use these to help pay their fees. (All savings limits are listed on Factsheet 431, Benefits rates and income/savings thresholds.)

Nursing care costs

The NHS will cover the cost of any nursing care that a person in residential care is assessed as needing. This cost is a flat rate of £101 a week, and is called NHS-funded nursing care (formerly the registered nursing care contribution, or RNCC). The flat rate was introduced in October 2007. Either the person with dementia or the local authority will pay for the person's board and lodgings, depending on the person's financial circumstances.

The Department of Health has stated that anyone who was self-funding and receiving lower- or medium-band RNCC before October 2007 should see a reduction in their weekly care fees, as the new flat rate is higher than the old low and medium bands. If this has not happened, the Alzheimer's Society would encourage people to query the weekly care home fee with the home. There are transitional arrangements for those people who were on the high band prior to 1 October 2007. 

Respite care

Legislation detailed in the National Assistance (Assessment of Resources) Regulations 1992 states that people should repay the cost of respite accommodation wherever possible. Each borough has a standard charge for respite care. However, if a person feels that the request for payment is unreasonable, they can request a financial assessment. The local authority will then charge an amount that they feel can be justified. There should still be enough income left over for the person to have 'pocket money', as with paying for permanent residential care, see Factsheet 431, Benefits rates and income/savings thresholds.

Frequently asked questions

My husband is going into a home. We have £70,000 in a joint account and own our own property. What should we do?

When you complete the financial assessment form, remember that the local authority is assessing your partner for care, not you. Split the savings in two and set up separate bank accounts. This is because the local authority may just keep dividing the money in the joint account for assessment purposes, regardless of how much of it has been spent on your partner's care, leaving you with less than your original half. While you still live in the property, the local authority should not put a charge on it, and certainly should not suggest that you move to free up some cash.

I left my own home to live with and care for my mum, who is now going into residential accommodation. What will happen to my mum's house now?

Your mum's house may automatically be disregarded by the local authority when it assesses your mum's financial situation (for instance, if your mum's partner still lives there). However, even if the property is not automatically disregarded, the local authority can still decide to disregard it, since you have given up your own home to be a carer. The local authority has a duty to ensure that you are not housed at public expense.

Alternatively, the local authority may allow you to remain in the property but place a charge against it, which means that they will get their money back when the house is sold, whenever that may be.

I own half the property in which my gran resides, but she is going into care now. What will happen to my share of the property?

If the property is sold, you will get your half of the proceeds back and the local authority will reassess your gran, taking into account her half of the money. Alternatively, you could buy your gran out. You need to employ a valuer to view the property, but it is possible that you will be able to pay less than half of what the property is worth, as you will be the only willing buyer.

My dad is going into care and they say he needs to sell his house. Can we buy it from him for less than it is worth?

If you try to do this, the local authority can probably prove what is called deprivation of assets, which is not allowed. However, you could rent the property out if the rent met the cost of the weekly care home bills. Many carers prefer to do this if they want to keep the property in the family.

Your local Alzheimer's Society branch will always be willing to talk to you and offer advice and information to support your needs.

For more information, Dementia Catalogue, our specialist dementia information resource, is available on the website at alzheimers.org.uk/dementiacatalogue.

Factsheet 469

Last updated: May 2008
Last reviewed: May 2008
Reviewed by Sara Wilcox, Legal and Welfare Officer, Alzheimer's Society, and Linda Gabriel, Solicitor, Thackray Williams