9. Care home fees
For care home fees there is a national standard for charging and for deciding who is responsible for paying.
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.
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.
Deprivation of assets
If a person has an asset that they transfer to someone else to avoid using it to pay for their care, the local authority can assess the person as if they still have the asset. For example, transferring money into someone else's bank account or transferring ownership of a property into someone else's name in the hope that it is not included in the financial assessment may be seen as a deprivation of assets.
A local authority may consider that a deprivation of assets has occurred if they believe someone has deliberately reduced their assets to avoid charges for their care and support needs to be met.
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 property, 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 (as set out in the guidance used by local authorities)
- 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, 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. This applies especially in cases where the carer has given up their own home to care for the person. They may also allow the carer to continue to occupy the home while charging the fees against the home. Such a deferred payment agreement (DPA) (see below) means the fees can be recovered by the local authority when the property is sold.
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 is called the 12-week property disregard. 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 after 12 weeks, the local authority can continue to pay the care home fees via a deferred payment agreement. This means the local authority will claim back the money it has paid in care fees once the home is sold.
Deferred payment agreements
By taking out a deferred payment agreement (DPA), a person can 'defer' paying the costs of their care home until a later date. Payment is not written off but it is delayed. The local authority provides funding as a loan which is repaid when the property is sold.
The Care Act (2014) places a duty on all local authorities to operate a deferred payment scheme and to offer deferred payments to people meeting the criteria for the scheme. A DPA must be offered to anyone whose property offers adequate security and:
- whose needs are to be met through residential care
- who has less than the upper capital limit in assets excluding the value of their home
- whose home is not occupied by a spouse or dependent relative.
It may also be possible for some people in supported living to have a deferred payment agreement to pay for their care and support as long as they intend to keep their original home and pay for their supported living (care and accommodation rental) from their deferred payment scheme. Permission may be refused in certain circumstances, for example if the value or equity in the property is not enough to cover the loan.
The local authority should tell people about the scheme and how it works. They should signpost or tell people about sources of information, advice and advocacy if necessary, and if they feel someone might benefit from having a DPA.
In particular, the local authority should:
- consider potential options if the person loses capacity and offer advice on making arrangements for deputyship, Lasting Power of Attorney, and help through advocacy
- advise people that they will need to consider how they plan to use, maintain and insure their property
- keep people informed about the DPA as it continues and provide necessary information on termination of the agreement.
An important change brought in by the Care Act is that local authorities can now charge arrangement fees to set up the loan, as well as interest on the loan from the day it is set up.
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 usual or standard rate. The Care Act refers to it as the 'amount specified in the adult's personal budget'.
The local authority will normally tell you what the limit is. Often they will provide a list of care homes in the area within this budget and families can choose from this list. The family may find a different home in the area themselves that is within the local authority's budget.
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 must provide for the person's preferred choice of accommodation and must offer at least one option that is affordable within the local authority price limit. Unless there is good reason, it should offer a choice of more than one place.
The local authority may 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 local authority's price limit) and the extra cost of the more expensive care home. This is often referred to as a top-up fee. In some cases this can now be paid by the person with dementia themselves.
No one can be forced to pay a top-up fee. Local authorities can only seek top-up payments when the person, or their representative, refuses a care home that can genuinely meet their assessed needs within the
local authority's budget, and insists upon a more expensive care home instead.
Top-up fees may be paid to the local authority, or to the care home directly. The local authority must ensure that the person paying the 'top-up' is willing and able to meet the additional cost, and enters into a written agreement with the local authority, agreeing to do so. The agreement should include information about what will happen should fees change, or if circumstances change and fees cannot be 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 the person will be willing and able to continue to pay the extra amount for as long as is needed.
Personal expenses allowance (PEA)
The personal expenses allowance is the minimum amount of a person's income that must be left to them each week, to spend as they wish. It is not a benefit. It is the amount of money the person must be left with when they are contributing towards their care costs. There are some circumstances where the local authority can increase the amount of the PEA, for example so that the person can pass back half of an occupational pension to a spouse or civil partner who remains at home.