This content was reviewed and approved by Andy Gray.
- Prices for different kinds of care
- Ways to pay for care
- Where to find advice and potential allowances
Make the right choice for your situation when it come to care homes
Once you’ve decided that a loved one needs to move into a care home, there can be the equally difficult consideration of how to pay for it. Many people worry about running out of money or being forced to sell a family home, but there are several different options to help fund residential care.
Understanding which one is right for you is a key part of the process. Take some time to find out about different benefits and their criteria, the help available from your local council or NHS, and the ongoing cost of the care, before you move your relative into a home. Then all you’ll need to think about is making sure you’ve packed their favourite slippers.
How much do different types of care home cost?
There are several factors that affect care home fees, such as the area you live in, the care home itself, and your financial circumstances. On average, it can cost around £949 a week for a residential care home place and more than £1,267 a week for a care home with nursing, according to Age UK. You may even find homes that charge more for specialised care, such as dementia services, will cost more than standard residential.
Your local council will carry out a care needs assessment, part of which is a means test that works out how much your relative can afford, or if they’re eligible for financial help from the council (it provides partial help if capital is between £14,250 and £23,250 or covers the whole cost if below £14,250). In England, anyone with capital of more than £23,250 must pay the full fees (£50,000 in Wales) [1]. This is known as self-funding.
If your relative has a significant healthcare issue, the NHS may contribute towards the cost (Funded Nursing Care). It may even be free if you qualify for continuous NHS treatment (Continuing Health Care), so check with a healthcare or social care professional.
How to pay for care
Residential care is a large financial commitment and in many cases a property sale will be required, but this may not need to happen for months or even years. There are a number of ways that care can be funded. This could include selling your home, renting out your home, utilising equity release or purchasing a care fees annuity. You may also combine these. options.
If your relative is deemed to be self-funding (see above) but it’s based on the value of their home, rather than liquidate assets, the local council may be able to fund the care home fees in the short term. This is known as a 12-week property disregard, and means you intend to sell the house to cover the fees but for now, they’re disregarding the property’s value.
After 12 weeks, the council can lend money to pay for care based on the property eventually selling. However, before agreeing to this, it’s vital that you get independent legal advice from a care fees planning specialist.
To prevent having to sell their home, your relative may consider gifting it to a family member – however, this comes with pitfalls so it's worth doing your research.
There could also be implications if they have no other reason for gifting the property except to avoid it being counted in the care needs assessment. If this is proven, then it'll be treated in the same way as if they owned the assets. The Local Authority can recover the property without having to prove a reason for the gift if the transfer was made less than six months before your relative moved to a care home.
It’s worth noting that their home won’t be counted as part of the means assessment if the care required is only short-term or if it’s still occupied by a relative aged over 60, a child, a disabled relative, or a spouse or civil partner.
Other ways to pay for care
It's worth checking if you are in receipt of any allowances you may be entitled to, such as Attendance Allowance, Funded Nursing Care and Continuing Health Care funding (see NHS section above). Before you start to pay for long-term care, we recommend seeking expert financial advice.
By seeking advice ahead of time and working out what they might be entitled to, financing a relative’s move to a care home can be cost-effective and as stress-free as possible. All of which means you can concentrate on finding the best place for them and making sure they, and you, can embrace their new chapter.
Sources
[1] AgeUK, 2019. Paying for residential care, https://www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-a-care-home/
