Paying for care and support in England
Many people with dementia will need care and support as their condition progresses. This is often a mix of care from family, friends and professionals. Paid care can take a number of different forms and focuses on meeting the person's needs to improve their wellbeing. It includes providing personal care at home, managing money, helping someone get dressed or at mealtimes, and supporting someone to get to work or go shopping. Care may be provided in a person's own home or in a day centre or care home. In the UK, the term 'social care' is often used to describe this type of care, as opposed to care that is provided by the NHS or by families.
Paying for social care can be a concern for many people - this factsheet outlines the various ways to pay for social care, and the amount someone might be expected to pay. It refers frequently to the Care Act (2014). This Act sets out the legal responsibilities of local authorities for adults who need care, as well as their carers.
This factsheet is for people living in England, and is not intended for Wales and Northern Ireland, where the laws are different. For information about the laws in Wales see factsheet W532, Paying for care and support in Wales, and in Northern Ireland see factsheet NI469, When does the health and social care trust pay for care?
Although there are national rules about who is required to pay for care and support, there are also some local variations. These mainly depend on the type of care and support that the person needs and where they live.
If someone is still living in their own home, they will often pay for the costs of their own care and support, and the local authority (council) may also contribute. This depends on the person's income and other assets (such as savings or shares). Some people will be assessed as having to pay for all their own care and support at home. These people are sometimes termed 'self-funders'. People living in their own home must be left with a basic level of income, and the Care Act (2014) states that charges must be 'reasonable' (see 'Care and support for someone in their own home' below).
If someone is living in a care home, they might pay for all of their care and support costs (self-funders), or they may make a contribution, with the local authority also contributing. Again, this depends on the person's income and assets. Some people in care homes may have all of their care funded by the local authority if they have a low income or few assets (see 'Care home fees' below).
Some people may have all or part of their care funded by the NHS (see 'Nursing care costs' below).
Information and advice
The provisions of the Care Act (2014) aim to build on people's strengths, capabilities and wellbeing, and help people to live independently for as long as possible. In order to do this, the Act says that people must have access to good quality information and advice from the first time they contact the local authority. This may help people with dementia, carers and families to take control and make informed choices about care and support needs.
Local authorities do not have to provide all elements of this information and advice themselves but are expected to signpost (tell people about) or refer people to independent and impartial sources of information and advice.
The wide definition of information and advice includes care and support-related aspects of health, housing, benefits, and employment. The information they supply must be clear and available to everyone.
Local authorities must identify people who might benefit from independent financial advice or information and help them to access it. This must include financial information and advice about understanding care charges and ways to pay so that people can make informed financial decisions.
Local authority staff should direct people to the financial information and advice they need. Before providing this advice directly to a person they should establish whether the person has decision-making capacity, or if a deputy of the Court of Protection or a person with Enduring Power of Attorney or Lasting Power of Attorney is acting on behalf of the individual (for more information see factsheet 472, Lasting Power of Attorney).
Some people who have care and support needs now, or will do in the future, may have difficulty being involved in and making decisions about their care and support. They may not have anyone to support them - for example, a family member or friend. If a person has substantial difficulty and no one to help, a local authority must provide an independent advocate.
The local authority has a duty to carry out an assessment of a person's care and support needs. This is often known as a 'needs assessment' and it is used to tell the local authority about the person's care needs. The local authority uses it to decide whether the person is eligible for support. If so, the person is considered to have eligible care needs. The Care Act (2014) introduced a new national threshold for eligibility. For more information see factsheet 418, Assessment for care and support in England.
The local authority will then talk further to the person (and carer) to jointly produce a care and support plan, to work out how their needs will be met. After that, they will consider whether the person is eligible for financial support to meet their needs. The local authority cannot refuse to assess a person because they appear to have enough money to pay for their own care (see 'Self-funders' below).
A personal budget is an allocation of money calculated by a local authority as being necessary to meet a person's eligible care needs. The local authority will provide a statement to make it clear to the person how much money is available from the local authority to meet their needs (sometimes called an 'upfront allocation'). This is intended to give the person greater choice and control over how that budget could be used to purchase care and support.
There are several ways that a personal budget can be paid and managed, including direct payments, where the money is managed by the person (or someone else on their behalf) and used to pay for care and support. Many people choose to have the local authority or a care agency manage their budget (sometimes called self-directed support). There will be a financial assessment and it may be necessary for the person to contribute to their personal budget. For more information see factsheet 473, Personal budgets.
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, and sometimes it will be a combination of both. The financial assessment varies on the type of care 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.
The person doing the financial assessment is likely to ask the person with dementia or their carer/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. The Care Act (2014) states that if a person is going to receive care and support that has a low cost, it may not be necessary to do a full detailed financial assessment. See 'Light-touch financial assessments' below for more information.
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.
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 Personal expenses allowance (see 'Personal expenses allowance' below).
- Both capital and income must be taken into account. It 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 that the person will contribute towards their care. This should show clearly what has been taken into account.
Light-touch financial assessments
In some circumstances, a local authority may choose to treat a person as if they have had a financial assessment, even if they haven't. This is called a 'light-touch financial assessment'.
If the local authority decides to do this it must inform the person that a light-touch assessment has taken place and make it clear that they still have the right to request a full financial assessment. This might be needed if there is a dispute about the charges, for example, and a full assessment may be appropriate.
The main circumstances in which a local authority might consider carrying out a light-touch financial assessment are listed below:
- Where a person has significant financial resources, and does not wish to undergo a full financial assessment for personal reasons, but wants the local authority to arrange their care. The person will then be self-funding but the local authority must be satisfied that the person can afford, and will continue to be able to afford, any charges due.
- Where the local authority charges a small or nominal amount for a particular service that the person is clearly able to afford, and carrying out a financial assessment would be disproportionate (ie requires more resource to do the financial assessment than to provide the service).
- When an individual receives means-tested benefits which demonstrate that they would not be able to contribute towards their care and support costs.
Types of care and support that cannot be charged for
The local authority may charge people for care and support services, and for arranging them, but some types of care and support must be free of charge.
- intermediate care, including reablement (for up to six weeks)
- aids and minor adaptations to the home costing less than £1,000
- after-care/support provided under the Mental Health Act 1983 section 117
- NHS services
- any services that an authority has a duty to provide based on other legislation.
Care and support for someone in their own home
Most local authorities will charge for care that is provided in someone's own home. How much the person pays will depend on the financial assessment.
The Care Act (2014) states that any charges must be 'reasonable'. It says that people receiving care should not be expected to live on an income lower than a 'basic level'. This basic level is calculated as the income received on Income support or the guarantee credit element of Pension credit, plus an extra 25 per cent. Anybody whose income does not exceed the basic level should not be charged for homecare.
Individual local authorities can decide whether or not to count severe disability premium, Disability living allowance, Personal independence payment or Attendance allowance as income. If a person's care need means that they require 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 is eligible for this higher level because of the supervision they need during the night, the additional higher amount should not be counted in a financial assessment for care the person needs during the day.
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 has its own guidance, so this can vary depending on where the person lives. A copy of the local authority's charging policy should be available online or can be requested. It 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 or income is below the threshold, the local authority should fund their care.
Once someone's savings or income have dropped below the threshold, the local authority should start paying for their care services. A local authority should regularly review a person's savings so that they are aware of when it 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.
Importantly, the value of the person's home is disregarded in assessing their contribution towards the cost of domiciliary care.
If someone refuses to pay for homecare, the local authority cannot withdraw the service. They have a legal duty to meet people's eligible care needs. They would therefore be expected to continue to meet the person's needs while attempting to resolve any dispute.
If someone feels they have been excessively charged for care, they (or their carer) have a right to complain (see 'Complaints' below).
Replacement (respite) care
There are many different types of replacement care that can help carers to take a much-needed break. These include day centres, homecare services, residential stays and breaks to attend a social function, and they can be discussed when deciding on the support plan. Local authorities can choose to charge for this care, and many do.
If you are charged for replacement care services, you may find some financial help locally. It may be worth asking your local authority about local schemes or charitable organisations to help pay for replacement care. Carer break vouchers may be available. These are sometimes given by the local authority and can be used to pay towards replacement care.
The Care Act makes it very clear that replacement care is to meet the needs of the person with dementia, not the carer. The person with dementia may be financially assessed and, if appropriate, it is the person with dementia who pays for the replacement care, even if it is the carer who appears to take the break. For more information see factsheet 462, Replacement care (respite care) in England.
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.
For more information see factsheet 472, Lasting Power of Attorney, or factsheet 530, Becoming a deputy for a person with dementia.
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. For more information see factsheet 476, Selecting a
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. For current amounts see factsheet 431, Benefit rates and income/savings thresholds.
Care fees and the Mental Health Act 1983
If a person with dementia has been in hospital for assessment or treatment under section 3 of the Mental Health Act 1983, 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.
Nursing care costs
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 often difficult for people with dementia to meet the criteria because they are often assessed as having social care needs rather than healthcare needs. For more information see booklet 813, When does the NHS pay for care?
However, if a person with dementia is assessed for NHS continuing healthcare and found ineligible, they may still be eligible to receive NHS-funded nursing care contribution because they have a lower level of nursing care need. This is only paid to someone who is assessed as needing nursing care in a care home that is registered to provide nursing care. The nursing care contribution is a flat weekly amount. For the current rate see factsheet 431, Benefit rates and income/savings thresholds.
It is also possible to have a higher level of nursing care paid for by the NHS, if the person has a joint package of care. Under these circumstances, some care is assessed as healthcare, therefore NHS-funded, and some is social care. The social care element is means-tested and may be funded by the local authority and/or the person themselves.
If a person is paying for their own care in a nursing home they can still be found eligible for NHS-funded nursing care contribution which does not affect their benefits.
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 widow's 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.
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 will all go towards the cost of care. In these cases a person will be left with a Personal expenses allowance. For current amounts see factsheet 431, Benefit rates and income/savings thresholds.
Care home fees for self-funders
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 agree the financial arrangements together. However, they may still wish to have a needs assessment by the local authority.
The local authority must provide information and advice to everyone, even if a needs assessment finds that they are not eligible for care and support at this time. This includes self-funders to help them to prepare for any support needs in the future. The intention is to support the person's wellbeing and help them to plan so they can reduce or delay the need for further care or hospitalisation in the future.
Part 2 of the Care Act to be introduced in April 2016 will introduce a cap on care costs. It is important for people who are self-funding, as well as those who are funded by the local authority, to have a needs assessment so that the local authority knows what the person's eligible care needs are and how much has been paid towards meeting them. This figure will count towards the cap on care costs and it is important that the local authority (and individuals) keep a record of it.
Other points to note for self-funders:
- The local authority will only help with future care home fees if a person's funds run out and it has assessed the person as needing care in a care home.
- A needs assessment will provide information about the type of care needed and the options available. This information may help people who are self-funding to 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, though there may be a cost for this.
- If the person with dementia has not been assessed when they move into a care home, it is important to make sure a needs assessment is arranged (by a carer or care home manager) before their savings get
- If the person is making their own arrangements with the care home, or if a relative is doing this, they need to ensure that they are given a contract detailing the home's obligations and fees. It is important to be clear about the services that are included in the fees, what may be charged as 'extras', and how much notice is given if fees will increase.
- If a person is paying part or all of their own fees, the carer or family member should 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. The care home manager could be asked to arrange this or the GP could be asked to set this in motion. This is because the NHS can fund care provided by a registered nurse for those assessed as having such a need (see 'Nursing care costs' above).
If you have a complaint, first try to settle it with the local authority, NHS body or care home. Both health and social care complaints can ultimately be taken to the relevant ombudsman, but it is always necessary to try to resolve the issue locally first. The local authority and the local NHS clinical commissioning group should have a published complaints procedure that you can ask for. 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 care worker/support worker directly for my mum - who is self-funding - in her own home?
Yes. You can employ a care worker directly for a relative, and this can enable you to choose who you and your mum want and what they will do and when. However, you will take on responsibilities as an employer. You will need to consider matters such as an employment contract and paying tax and national insurance, as well as pension enrolment and liability insurance. It's also important that you consider cover for holidays or periods of sickness. There are local organisations that can help with these matters and guide you through the process. 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 him to move to a care home near you. His current local authority will still be responsible for paying his care home fees in the new area, up to the point at which the new local authority assumes responsibility. However, it is only obliged to pay for his care home fees up to the limit set for its own area, or for the area he moves to - whichever is lower.It is important that the local authority he hopes to move to is informed beforehand and they will then contact the local authority where he currently lives.
Since your father is moving to another area voluntarily, once he is considered to be 'ordinarily resident' in this new area the new local authority will be responsible for meeting his needs and paying for his care. The intention is that once everyone agrees about the move there will be no gaps in the care when the move takes place. The Care Act gives local authorities guidance on how to arrange such moves and avoid disputes about which local authority is responsible.
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?
Yes. It is possible to let out a person's house to avoid selling it. Your relative would still be classed as self-funding, because the value of the home is still included in the financial assessment. Therefore, it is important that the rental income 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 expenses to consider, such as letting and management costs, insurances, maintenance and income loss when the property is not let.
If a deferred payment agreement is used so that the house can be rented out, the local authority may impose conditions related to the rental arrangements such as tenancy agreements and maintenance. See 'Deferred payment agreements' above.
The organisations listed below can help with information and advice.
Other useful organisations
1-6 Tavistock Square
London WC1H 9NA
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.
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. 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.
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 of Later Life Advisers, or SOLLA is a not-for-profit organisation which can provide information on accredited financial advisers who specialise in later life matters.
Last reviewed: March 2015
Next review due: March 2016
Reviewed by: Jill Manthorpe, Professor of Social Work, Director of the Social Care Workforce Research Unit, King's College London and Tish Hanifan, Barrister and Joint Chair, Society of Later Life Advisers
This factsheet has also been reviewed by people affected by dementia. A list of sources is available on request.