Paying care home fees
Before a person with dementia moves into a care home, it is important to get advice about the kind of care that they will need and their financial situation. The person will need to know how much they will be expected to contribute towards the cost of their care and how their income and savings will be affected. This factsheet looks at the different funding available and elegibility criteria. It should be read in conjunction with Factsheet 431, Benefits rates and income/savings thresholds, which gives details of the current rates.
All homes offering residential or nursing care are now known as care homes. For more information on the different types of care offered by care homes see Factsheet 465, Choices in care. Care homes that provide nursing care are generally more expensive than care homes that provide residential care.
Seek advice on the person with dementia's financial situation and on what benefits they are entitled to before they go into care. See 'Useful organisations' for details of organisations that can advise you.
Different ways of funding care in a care home
- Local authority social services departments are responsible for arranging funding for people who are assessed as needing care in a care home and needing assistance with funding.
- Some people pay their own fees; they may still be able to claim some social security benefits to help with the cost of fees.
- Occasionally, the NHS provides free continuing care in any setting. For more information, contact your local Primary Care Trust or Health Board. See also, Alzheimer's Society booklet When does the NHS pay for care?
- The NHS will cover the costs of the nursing element of any care that a person is assessed as needing, which is provided in a nursing home. For more information see Factsheet 452, Assessments for NHS-funded nursing care.
Help with funding
Assessment of needs
The first step for a person requiring help with paying care home fees, either now or in the future, is to have their needs assessed by the local authority social services department. For more details on how to arrange an assessment and on what this involves, see Factsheet 418, Community care assessment. The local authority can only fund people who have been assessed and are eligible for services.
If the local authority decides that the person does not meet their criteria for needing care in a care home, they are not obliged to fund them, however little money the person has. If you disagree with a local authority decision, you can use the local authority complaints procedure. The social services department can explain how to do this.
If a person is assessed as needing care in a care home, social services will carry out a financial assessment to decide how much that person will have to contribute towards the cost of their care.
The local authority financial assessment takes into account both income and capital.
- Income includes money received regularly − for example, from pensions and benefits.
- Capital includes savings, investments and, in some cases, the value of the person's home.
The person with dementia is only assessed on their own income and capital or on their share of jointly held resources.
Ask the local authority to provide a written explanation of how it has worked out the person with dementia's contribution. It should be clear what has been taken into account.
Before the move to the home takes place, check what services are covered by the fees so that there can be no misunderstandings with the local authority or the care home about any 'extras'.
Points to remember
In England, the government sets minimum and maximum capital limits that directly relate to whether individuals are eligible to have their care fees paid by the local authority. If you are in Wales and you have money under the upper limit then the local authority will pay for your care home fees. See Factsheet 469, When does the local authority pay for care? for more information and Factsheet 431, Benefits rates and income/savings thresholds for the current figures.
- The person with dementia will be expected to claim all the benefits to which they are entitled to help pay their fees.
- If the person holds capital jointly, only their share will be taken into account in the assessment − it will be assumed that their share is 50 per cent, unless you can show that a different proportion is owned by each holder.
- Half of any occupational or personal pension will not be considered by the local authority as income, providing at least half is passed on to a spouse or civil partner still living at home.
- Some benefits, such as the mobility component of the disability living allowance, are not counted as income and some, such as the war widow's pension, are only partially counted.
- If the local authority is paying all of the care home fees, any benefits the resident is entitled to, including their state pension, will be used towards the cost of their care. The person will be left with some 'pocket money'.
Price limits for care home places
The local authority will tell you what its usual price limits are for places in care homes offering residential or nursing care. However, if it is not possible to find a home that meets the needs of the person with dementia within the local authority's price range, the local authority has to fund the person in a more expensive home.
A home can be chosen in any part of the country. The local authority is only obliged to fund a person up to the limit for their own area, or for the area the person moves to − whichever is the lowest. However, it may agree to pay more for a home if the person's assessment includes the need to move to another part of the country − for example, to be nearer to family.
The local authority may also agree to pay for a place in a more expensive home if a third party, such as a family member or a charity, agrees to pay the difference. This is often called a top-up fee and in most cases it cannot be paid by the resident.
The amount of the top-up fee is the difference between what the local authority would usually expect to pay (depending on that particular person's care needs) and the extra cost of the care home.
Guidance states that if a top-up is agreed, the local authority remains responsible for all of the care home fees and must contract with the care home to pay these fees in full. The local authority can ask the third party to pay their contribution to the home directly or to themselves. However, the local authority is still responsible for the full cost of the accommodation if the top-up is not paid.
If you agree to pay a top-up fee it is advisable to get a written agreement with the local authority, the home and the resident. The agreement should include information about what will happen with rises in the cost of the care home and what would happen if the fees are not paid.
If top-up fees are not maintained, the local authority may move the person to a home within their budget. However, the person's needs must be met by this new home. To avoid the risk of disruption this could cause, it is important to make sure that you will be able to pay the top-up fees for as long as they are needed, and that you are prepared for possible fee increases.
Guidance states that local authorities should only seek top-up payments where there was a genuine alternative of a cheaper care home (within the local authority's budget) that would have met the person's needs and this home was turned down by the person with dementia or their family. The guidance also states that a local authority cannot ask for a top-up if it has decided to offer someone a place in more expensive accommodation in order to meet their assessed needs.
Frequently asked questions
Does the person's home have to be sold?
If the person with dementia owns their home, this may be counted as capital and may have to be sold to meet the cost of care home fees. If the home is not sold within a certain period of time, the local authority can put a legal charge on it and claim back what is owed when the house is sold. However, there is a period of 12 weeks' grace after the person decides to become a permanent resident at a home, during which the value of the house is not taken into account.
If the person does not wish to sell their home, or is having difficulty selling it, the local authority may offer a deferred payments scheme. This provides an interest-free loan to cover the amount needed for the care home fees, which is paid back when the person's home is eventually sold.
A person's home will not be taken into account as capital if it is occupied by:
- a husband, wife or unmarried partner
- a close relative under the age of 16, or over the age of 60
- a relative under the age of 60 who is disabled.
The local authority may also ignore the value of the house if it is the permanent home of a carer.
Will the person's relatives be liable?
When a local authority in England or Wales assesses the amount that the person with dementia should contribute to care, it should consider the income and savings of that individual only. Old rules in England and Wales that allowed local authorities to charge a husband, wife or civil partner were repealed on 6 April 2009.
The situation may be different in Northern Ireland. If a relative thinks they are being charged they should check with the local authority and consult their local Citizen's Advice Bureau or Alzheimer's Society in Northern Ireland for advice.
What if the person is paying privately?
If the person with dementia can afford to pay the fees, they can approach a care home directly and sort out the financial arrangements themselves. However, if they may need help with the fees in the future, are unsure about the type of care they need, or are unable to make the arrangements themselves, they should ask the local authority to assess their needs.
This is because:
- the local authority can only help with future fees if it has assessed the person as needing care in a care home, and has approved the home chosen
- the assessment will provide information about the type of care needed and the services available
- if the person is assessed as needing to be in a care home and is unable to make the necessary arrangements, the local authority has a duty to make the arrangements for them.
If the local authority agrees that the person needs to enter a home, and the home meets all of the local authority's criteria, the local authority can make an agreement with the care home. Such an agreement states that the local authority will start to make a financial contribution towards costs once the person's savings drop to below a certain amount. (See Factsheet 431, Benefits rates and income/savings thresholds for current figures.) If no such agreement is made, there may be difficulties should the cost of care in the home be greater than the amount that the local authority is usually prepared to pay.
Other things to remember when paying privately include the following:
- If the person with dementia is not assessed before they enter a home, make sure that an assessment is arranged before their savings get too low.
- If the person is making their own arrangements with the care home, make sure that they are given a contract detailing the home's obligations and fees. It is important to be sure what services are included in the fees, what may be charged as 'extras', and how much notice is given if fees are going to be increased.
- If a person is paying their own fees, make sure they are claiming all the benefits to which they are entitled. They should continue to receive the attendance allowance or disability living allowance (care component) if they have been receiving these.
- If the home chosen provides nursing care, the person will need to have their nursing needs assessed. This is because the NHS funds care provided by a registered nurse (see below) for those assessed as being in need of such care.
Will I have to pay for nursing care?
The NHS is responsible for providing free nursing care (provided by a registered nurse) in a nursing care home.
If a person may need nursing care, a registered nurse (either working at the care home or appointed by the primary care trust in England or Health Board in Wales) will conduct an assessment of their needs. If they decide that the person's needs should be met in a nursing care home, the NHS will pay towards the nursing element of that care. Even people who are funding their own care will receive this payment. It will not affect their benefits.
In England, NHS-funded nursing care used to be paid in bands before a flat rate was introduced. Residents in a nursing home before 1 October 2007 who were entitled to the high band contribution now get £146.30 per week (for 2010/11), unless their care needs change.
If a self-funding resident was in receipt of either the low or middle band at 1 October 2007, they should have seen a reduction in their weekly care fee. If this has not happened, Alzheimer's Society would encourage people to query the weekly care home fee with the home. For current rates see Factsheet 431, Benefits rates and income/savings thresholds. For more details, see Factsheet 452, Assessments for NHS-funded nursing care.
What do I do if I have a complaint?
If you have a complaint, try to settle it with the local authority, NHS body or care home first. They should have a published complaints procedure that you can ask to see. However, if this is not successful, talk the matter through with someone who can advise you on the best way to proceed, as funding can be very complex. Your local Alzheimer's Society or the local branch of the Citizens Advice Bureau, or Age UK group, Counsel and Care or the Relatives and Residents Association may be able to help. Counsel and Care publishes a helpful factsheet about how to make a complaint.
Each care home has its own complaints procedure. Ask for a copy if you do not already have one. If you still have concerns, contact the Care Quality Commission in England, and the Care and Social Services Inspectorate in Wales (details at the end of this factsheet).
Provides information and advice for older people in the UK. Age UK has been created by the merger of Age Concern and Help the Aged.
Benefit Enquiry Line (BEL)
Red Rose House
Lancashire PR1 1HB
T 0800 88 22 00 (free helpline open 8.30am-6.30pm weekdays and 9.00am-1.00pm Saturdays)
0800 243 544 (textphone)
National, free telephone advice and information service on benefits for people with disabilities, their carers and representatives. Note that advisers can send out forms and give advice but they have no access to personal records.
Care and Social Services Inspectorate Wales
Inspects and reviews local authority social services and regulates and inspects care settings and agencies across Wales.
Care Quality Commission
Regulates, inspects and reviews all adult social care services in the public, private and voluntary sectors in England. Formerly the Commission for Social Care Inspection (CSCI).
Citizens Advice Bureau (CAB)
Your local CAB can provide information and advice in confidence or point you in the right direction. To find your nearest CAB look in the phone book, ask at your local library or look on the citizens advice website (above). Opening times vary.
Counsel and Care
Provides advice, information and financial support for older people, their families and carers. Produces factsheets on topics ranging from benefits to care homes, including Choosing a care home: fees and funding, Paying care home fees: community care, and Community care and the NHS: a guide to making a complaint.
Relatives and Residents Association
Advises relatives and close friends of people in care homes on a range of topics, from how to get an assessment to what to do when problems occur in a home.
Last updated: August 2010
Last reviewed: July 2010
Reviewed by: Caroline Bielanska, Director, Solicitors for the Elderly and Luke Warren, Information Officer (Legal and Welfare Rights), Alzheimer's Society
If you have any questions about the information on this factsheet, or require further information, please contact the Alzheimer’s Society helpline.
0300 222 11 22
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