The Care Fees Conundrum

With fees averaging around £30,000 per year for standard residential care in the South West* you may be concerned about how you will fund the cost of long term care if you or a loved one are considering a move into a care home.

Most people will pay something towards their residential care costs but each individual’s circumstance will vary. The process starts with a local authority assessment of you or your loved one under the Care act 2014.

Some types of very specialist care and support are fully funded, the boundaries between health and social care responsibilities may not always be clear. Services provided by the NHS are fully funded, whereas those arranged by social services are means tested, so the outcome of any decision as to who has overall responsibility for your care can have significant financial consequences.

If you do not qualify for NHS funding, you will have a financial assessment to see if the local authority will have to contribute towards the costs of a care home place. Depending on your finances, a local authority may ask you to contribute towards the costs of your care, up to the full amount. This will depend on the level of your capital assets, which will place you into one of the following three categories:

• Over £23,250 – you will have to pay your own fees
• Under £23,250 – you will qualify for some council help
• Under £14,250 – you will get your fees paid for by the council, but will have to contribute your pension and benefits towards it

 As part of this financial assessment, the value of your home will be taken into consideration, but the rules around when you will have to sell your home can be complicated, so it is worth seeking specialist advice if this seems likely.

If the council is funding your place in a care home, they will allocate you an amount of money that can meet your assessed care needs. You can still choose to move to a care home that is more expensive as long as someone agrees to pay the difference, which is known as a ‘top-up’.

Proposals set out in the government's recent Care Act legislation contained many changes to social care as a whole, but the two main changes affecting how care is funded were changes to the means test and the introduction of a lifetime cap on care costs of £72,000.

After April 2020 the £23,250 upper limit will be raised to £118,000 and the lower limit will be raised to £17,000, meaning that anyone with less than £118,000 in savings will be entitled to some financial support to help pay their care costs. It is also proposed that a cap of £72,000 will be introduced, meaning that nobody will have to pay more than a total of £72,000 for their eligible care needs to be met.

Both of these changes were due to come into effect from April 2016, but the government has already delayed introducing the cap on care costs until April 2020 and looks set to do the same with the changes to the means test.

It is important to remember that each person’s circumstances are different and how these changes affect you will depend on what kind of care you need and your individual financial circumstances.

BPE has a dedicated team that works closely with specialist independent financial advisors and can offer specialist advice on a range of areas including Managing Affairs, Wills and Probate, Powers of Attorney and NHS refunds.

*Source: Laing & Buisson Care of Older People, UK Market Report 2013/14.

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.