Financial assessments in Wales

Find out what a financial assessment is and why someone affected by dementia might need one. 

What is a financial assessment?

A financial assessment is used to help decide who will pay for the care and support required. Usually this will be either the person themselves or the local authority, but sometimes it will be a combination of both.

The financial assessment varies depending on the type of care and support required. For example, it will be different depending on whether the person is receiving homecare or care in a care home, although there are some similarities.

What happens when an assessment is carried out? 

The person doing the financial assessment is likely to ask the person with dementia or their carer or relative to complete some forms about their finances and declare that this information is true. Someone from the local authority may also visit the person to help them to fill in the forms.

It can feel like an invasion of privacy when the local authority or its representative is looking over something as private as a person’s finances. Carers may need to reassure the person with dementia that this needs to be done. If someone refuses to answer the financial questions, they may automatically be charged for their own care, so it is a good idea to cooperate, if possible.

Local authorities can charge a flat rate for low-level, low-cost care and support in a person’s own home, or set a flat rate for care such as preparing meals or doing laundry. If a local authority charges a flat rate, it is not obliged to carry out a financial assessment. There is a maximum weekly charge that any local authority can impose for services at home. 

Some key points about the financial assessment:

  • Income refers to any money the person receives regularly, for example benefits or a pension. Capital refers to any other assets the person has. This includes savings, investments and, in some cases (for residential care), may include the value of their home. The person will always be allowed to keep a certain amount of income known as a Minimum income amount (previously called Personal expenses allowance). For more information see ‘Minimum income amount’ below.
  • Both capital and income must be taken into account. They will then either be fully included in the assessment, partially disregarded or fully disregarded.
  • An example of an asset that must be fully disregarded is the value of a person’s main or only home when they are receiving care in a setting that is not a care home or where a ‘qualifying relative’ (eg a partner) occupies the property as their main or only home. See ‘Property and the financial assessment for care home fees’ below.
  • The forms may ask about a partner’s finances but, once it is decided what belongs to the person with dementia and what belongs to the partner, the assessment should only take into account the finances of the person with dementia, and no one else’s.
  • If there are joint bank accounts or other assets held jointly, 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.
  • The local authority must provide a written statement of how they have calculated the amount the person will contribute towards their care. This should show clearly what has been taken into account and regular statements should follow.
  • The person may be required to provide proof of their financial situation as part of the financial assessment. The local authority can ask them to produce this within 15 working days. If they cannot meet this deadline and have a good reason, they should speak to the local authority and ask for an extension.

Benefits and financial assesments

Certain benefits, such as the mobility component of Disability living allowance, must not be taken into account in a financial assessment for paying for care. Some other benefits, for example the War widow’s pension, should only be partially counted. Half of any occupational or personal pension will not be considered, as long as it is passed on to a spouse or civil partner who remains at home.

Depending on the outcome of the financial assessment, 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 will all go towards the cost of care (including a state pension, any other private pension and income) In these cases a person will be left with a Minimum income amount. For current amounts, see our benefits rates pages