Paying for care
Many people with dementia will reach a stage where they need additional care and support to help them live well with the condition. Care can take a number of different forms and involve a wide variety of services. Examples include day care services, personal care services in someone's own home, and full-time care in a care home. For some, how this care is paid for can be an additional worry. This factsheet outlines the various ways to pay for care, and what someone may be expected to pay.
This factsheet is for people living in England and Wales, and is not intended for Northern Ireland, where the laws are different. For information about the laws in Northern Ireland, see factsheet NI469, When does the health and social care trust pay for care?
Please note that this information will only be valid until April 2015, when the factsheet will be updated to reflect changes the government is making to the rules around paying for care.
The community care assessment
It is the local authority that decides who pays for the care of a person with dementia. Before they do this they will carry out a community care assessment. This is often referred to as a care needs assessment. The local authority has a duty to carry out this assessment when it appears that someone living in their area may need services. The local authority cannot refuse to assess a person who appears to have enough money to pay for their own care.
The community care assessment will consider what care a person needs and where this care is to be provided. For example, it may show that someone needs home visits to provide assistance and personal care around the home, or that they need full-time care in a care home. This assessment will be used to produce a care and support plan for the person, showing what type of care is needed to meet their needs.
For more information see factsheet 418, Community care assessment.
Eligible care needs
Following the community care assessment, the person's care needs are then reviewed to decide whether that person is eligible for support from their local authority (subject to a financial assessment, see below). Local authorities set their own eligibility criteria, based on one of four care levels: low, moderate, substantial and critical. Every local authority makes their criteria available on request, so you can ask to see them. For more information see factsheet 418, Community care assessment.
After the community care assessment, if someone has an eligible care need, the local authority then assesses that person's finances. The financial assessments vary depending on the type of care, ie whether the person is receiving residential or non-residential care, although there are some similarities.
The financial assessment tends to involve the person or their carer completing some forms that ask questions about their finances. Someone from the local authority may also visit the person to ask questions about their finances and fill in the forms on their behalf.
The financial assessment is used to decide who will pay for the care. Generally this will be either the person themselves, the local authority, or a combination of both. It can feel invasive to have someone look over something as private as your finances. Carers may need to reassure the person with dementia that this is something that needs to be done. If someone refuses to answer the financial questions, they may automatically be charged for their own care.
Some key points about the financial assessment:
- The assessment should only take into account the finances of the person with dementia, and no one else's. The forms may ask about a partner's finances, but these parts do not need to be completed.
- It considers both income and capital. Income refers to any money the person receives regularly, for example benefits or a pension. Capital refers to the assets someone has. This includes savings, investments, and in some cases (for residential care) may include the value of their home.
- If anything is held jointly, for example in a joint bank account, the assessment can only take into account the share belonging to the person with dementia. It is assumed that their share is 50 per cent, unless it is shown otherwise.
- You can ask the local authority to provide a written statement of how they have calculated what the person will contribute towards their care. This should show clearly what has been taken into account.
Care and support for someone in their own home
Most local authorities will charge for care that is provided in the person's own home. How much the recipient of care pays will depend on the financial assessment, and also where the person lives, as each local authority can decide its own charges.
The Department of Health Guidance for Local Authorities is something that every local authority should follow. It states that any charges must be 'reasonable', and suggests that people receiving care should not be expected to live on an income lower than people receiving Income support or the guarantee credit element of Pension credit plus a buffer of 25 per cent. This level of income is called the 'basic level'. Anybody whose income does not exceed 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 a care need requires a service during the day, the local authority should not count benefit entitlement linked to care that is needed at night. For example, if a person receives the higher level of Attendance allowance, and they are eligible for this higher level because of supervision they need during the night, the additional higher amount should not be counted in a financial assessment for care they need during the day.
To help decide whether they will pay for someone's care, each local authority also has their own guidance. This may contain a savings and income threshold. Anyone with savings or income above this threshold is expected to pay for their own care. If their savings are below the threshold, the local authority should fund their care.
Depending on the financial assessment, a local authority may ask a person to contribute a certain amount towards the cost of care, with the local authority paying the rest. Each local authority sets its own savings limit, so this can vary across the country. You can request a copy of your local authority's policy.
Once someone's savings or income have dropped below the threshold, the local authority should start paying for that person's care. A local authority should regularly review a person's savings so that they are aware when they should take over paying some or all of the care costs. If you feel that someone's savings have dropped below the limit, or are about to, you can contact the local authority to ask for a review.
If someone refuses to pay for home care, social services cannot withdraw the service. They have a legal duty to meet the care needs of people with dementia. They would therefore be expected to continue to meet the person's needs while attempting to resolve the financial situation.
If someone feels they have been excessively charged for care, they (or their carers) have a right to complain (see 'Complaints' below).
There are many different types of respite care that can help carers to take a much needed break. These include day centres, home care services and residential stays. Local authorities can choose to charge for this care, and many do.
If you are charged for respite services, you may find some financial help locally. It may be worth asking your local authority about local schemes to help fund respite care. Carer break vouchers may be available to you. These are given by the local authority and can be used to pay towards respite care.
For more information see factsheet 462, Respite care.
If a person's care is funded by the local authority, the person may choose to receive this funding in the form of a personal budget. A personal budget is money that a local authority gives to someone to spend on meeting their own eligible care needs. The money can be spent on a wide range of products and services. Personal budgets offer services in a way that allows people to make choices about their care.
Privately funded community care
If the needs of a person with dementia don't fit the local authority's eligibility criteria, that person is expected to fund their own care. This is also something that can be determined by the financial assessment. The local authority can provide information on local care agencies to people paying for their own care. The social services can also still provide a community care assessment; they cannot refuse just because someone is self-funding. This assessment can help someone understand what level of support they need.
There may be other local community groups and charities that can help, or provide information about where to go for support or to get care. Some specialist charities and foundations may offer grants, especially occupational ones such as those serving the armed forces.
Care home fees
Unlike non-residential care, for care home fees there is a national standard for charging, and for deciding who is responsible for paying, although this is different in England and Wales.
In England, there are two threshold limits:
- Upper threshold – If the financial assessment shows that a person's capital and income take them above the upper threshold, they will be expected to pay their own care home fees.
- Lower threshold – If a person's capital and income take them below the lower threshold, the local authority will pay their care home fees.
- Between the thresholds – If a person's capital and income take them below the upper threshold but above the lower threshold; both the local authority and the person will contribute towards the care home fees.
In Wales, there is only one threshold:
- If someone's capital and income take them above the threshold, they are expected to pay for their own care.
- If someone's capital and income take them below the threshold, the local authority will pay the person's care home fees.
For information about the current threshold levels see factsheet 431, Benefit rates and income/savings thresholds.
Property and the financial assessment for care home fees
If the person with dementia owns their own home, this may be included in the financial assessment to determine who pays care home fees. However, the home will not be taken into account if one of the following people also lives in the home, and will continue to live there after the person has moved into a care home:
- a husband, wife or civil partner
- a close relative over the age of 60
- a dependent child
- a relative who is disabled or incapacitated.
In cases where the person's house is also the permanent home of a carer, and especially in cases where the carer has given up work (or even their own home) to care for the person, the local authority has discretion to decide whether or not to include the value of the home in the assessment for as long as they are living there. They may also allow the carer to continue to occupy the home while charging the fees against the home (to be recovered by the local authority when the home is sold). Again, this is at the discretion of the local authority.
Where the value of a person's home is included in a financial assessment, this should not be taken into account for the first 12 weeks of the person living in the care home. This may mean that, during this time, the local authority will pay or contribute towards someone's fees. This grace period can enable a family to arrange to sell the home, or speak to the local authority about other options. If the home is not sold within this time, the local authority can continue to pay the care home fees, but put a legal charge on the home. This means the local authority will claim back the money they have paid in care fees once the home is sold.
If someone 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 then paid back when the person's home is eventually sold. It is interest free until 56 days after the person dies.
Price limits for care home places
There is usually an upper limit on how much a local authority will spend on an individual's care home fees. This is referred to as the standard rate. The local authority will normally tell you what their usual price limits are. Often they will provide a list of care homes in the area that they will fund; families can choose from this list. The family may find a different home in the area that is within the local authority's budget. Factsheet 476, Selecting a care home, may help those who are trying to find a care home for a relative.
The local authority has a duty to meet the assessed care needs of the person with dementia. Therefore, if it is not possible to meet the person's needs within the local authority's price limit, the local authority is obliged to fund the person in a more expensive care home.
The local authority may also agree to part-fund a place in a more expensive care home, as long as a third party (such as a relative or a charity) agrees to pay the difference. This difference is between what the local authority would usually expect to pay (based on the person's care needs) and the extra cost of the care home. This is often referred to as a top-up fee. In most cases this cannot be paid by the person with dementia themselves.
The local authority can ask the third party to pay the top-up fee to them, or to the care home directly.
If you agree a top-up fee arrangement, it is essential to get written agreement with the local authority, the home and the resident. The agreement should include information about what will happen should any fees change, or if fees are not paid.
If the top-up fee stops being paid, the local authority may move the person to a care home within their budget. This new home must meet the person's assessed needs. To avoid this disruption, it is important to consider whether you will be able to continue to pay the fees for as long as is needed.
No one can be forced into paying a top-up fee, so local authorities can only seek top-up payments when there is a genuine alternative of a cheaper home that can meet the person's assessed needs within their budget.
Benefits and care home fees
Certain benefits, such as the mobility component of Disability living allowance, must not be taken into account in a financial assessment. Some other benefits, for example the War widows pension, should only be partially counted. Half of any occupational or personal pension will not be considered, as long as this half is passed on to a spouse or civil partner regardless of where they are living.
Depending on the outcome of the financial assessment, a person's benefits may be affected. If someone is self-funding, they will still be entitled to their benefits; these can help towards paying fees. If the local authority is paying a person's care home fees, then any benefits the person is entitled to or was receiving (including a state pension), any other private pension, and income sourced will all go towards the cost of care. In these cases a person will be left with a personal expenses allowance, often referred to as pocket money. For current amounts see factsheet 431, Benefit rates and income/savings thresholds.
Nursing care costs
The NHS is responsible for providing free nursing care (delivered by a registered nurse) in a nursing care home. If a person with dementia may need nursing care, the registered nurse at the care home will usually assess their needs. If it is decided that the person's needs should be met in a nursing care home, the NHS will pay towards the nursing element of that care. This is a flat weekly amount: for the current rate see factsheet 431, Benefit rates and income/savings thresholds.
Even people who fund their own care will receive this weekly nursing care payment if eligible. It will not affect a person's benefits.
In some cases a person with dementia may be entitled to receive NHS continuing healthcare funding. This funding from the NHS will cover the full cost of someone's care, whether in their own home, or in a care home. It is rare for people with dementia to meet the criteria, as it does require very acute healthcare needs. For more information see booklet 813, When does the NHS pay for care?
Care fees and the Mental Health Act
If a person with dementia has been in hospital for assessment or treatment under section 3 of the Mental Health Act, the NHS is responsible for any related after-care. This can include any care the person needs in their own home or in a care home. The purpose of this is to try to prevent readmission to hospital. For more information see factsheet 459, The Mental Health Act 1983 and guardianship.
If someone is classed as a self-funder and is paying for their own care home fees, they can approach a care home directly and sort out the financial arrangements themselves. However, they may still wish to have a community care assessment by the local authority for a number of reasons:
- The local authority can only help with future fees if it has assessed the person as needing care in a care home.
- The assessment will provide information about the type of care needed and the services available. This information may help people who are self-funding decide whether the care home they are considering is appropriate.
- 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 arrangements for them.
There are other things to note when paying privately for a care home:
- If the person with dementia has not been assessed when they enter a home, make sure 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.
- 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 for those assessed as having such a need (see 'Nursing care costs' above).
- Some people choose to take financial advice to help them look through their various options.
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 decisions can be complicated. Some of the organisations listed in 'Other useful organisations' at the end of this factsheet may be able to help.
Frequently asked questions
Can I employ a carer directly for my mum – who is self-funding – in her own home?
You can employ a carer directly for a relative, and this can enable you to have the choice in who the carer is and how they will work. However, you will then take on responsibilities as an employer. For example, you may need to consider an employment contract and paying tax and national insurance, and you may also need liability insurance. It's also important that you consider the carer's holidays and cover in case they are off sick. It might be worth talking about your options with your local authority or one of the organisations listed below who may be able to assist you in this.
My dad is moving into a care home and the local authority will be paying for his care. But he now wants to move to a care home near me in a different local authority. What happens now?
It is possible for a relative to move to a care home near you. His current local authority is still responsible for paying his care home fees. They are only obliged to fund your relative up to the limit for their own area, or for the area your relative moves to – whichever is lower. However, the current local authority may agree to pay more for a care home if your relative's assessment included a need to move to another part of the country – for example to be nearer to family.
My mother owns her home and is moving into a care home. We don't want to sell the home. Can we let it out instead?
In some cases it is possible to let out a person's house to avoid selling it. Your relative would still be classed as self-funding, as the value of the home would still be included in their financial assessment. Therefore, it is important that the rent covers the cost of care, or – if it does not – that there are sufficient funds to cover the difference or an arrangement made with the local authority. Also be aware that income from rental will be taxable and there will be costs to consider, such as letting and management costs, insurances, maintenance and income loss when the property is not let. The charities listed below can help with information and advice.
Other useful organisations
1–6 Tavistock Square
London WC1H 9NA
Wales – Age Cymru
Northern Ireland – Age NI
Provides information and advice for older people in the UK.
Citizens Advice Bureau (CAB)
Your local CAB can provide information and advice in confidence or point you to further sources of support. Trained CAB advisers can offer information on benefits in a way that is easy to understand. To find your nearest CAB, look in the phone book, ask at your local library or look on the website (above). Opening times vary.
Care Quality Commission CQC
National Customer Service Centre
Newcastle upon Tyne NE1 4PA
Regulates, inspects and reviews all adult social care services in the public, private and voluntary sectors in England.
Care and Social Services Inspectorate Wales
Welsh Government Office
Rhydycar Business Park
Merthyr Tydfil CF48 1UZ
Inspects and reviews local authority social services and regulates and inspects care settings and agencies across Wales.
Elderly Accommodation Counsel (EAC)
89 Albert Embankment
London SE1 7TP
EAC is a national charity that aims to help older people make informed choices about meeting their housing and care needs. They offer two services: the EAC Firststop advice line, offering information and advice to people about housing and paying for care, and the housingcare.org site, which enables people to search for care homes and for domiciliary care in their area.
6 Avonmore Road
London W14 8RL
Provides an information and advice service for older people, their families and carers, focusing on social care, welfare benefits and befriending services. They also offer local support, including one-to-one and group befriending schemes.
Society of Later Life Advisers (SOLLA)
The society links consumers and their families with accredited later life advisers who specialise in the financial issues of older people.
Last reviewed: March 2014
Next review due: March 2017
Reviewed by: Tish Hanifan, Barrister and joint Chair, Society of Later Life Advisers and Michael Roche, Technical Advice Support Officer – Social Care, Age UK. This factsheet has also been reviewed by people affected by dementia.
A list of sources is available on request.
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If you have concerns about Alzheimer's disease or about any other form of dementia, Alzheimer's Society's National Dementia Helpline (0300 222 1122) can provide information, support, guidance and referrals to other appropriate organisations.
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