The UK has an ageing population with nearly 12 million people aged 65 and above (ONS, 2018). As a result more people are likely to need care in later life. In this article we outline the main ways that someone may be able to recieve funding for care costs from the state.
There are four main ways to receive funding for care costs from the state:
> Local authority funding
> State benefits
> NHS continuing healthcare
> Nursing care contribution
Taking each of these areas of funding in sequence, we have outlined the help available and eligibility criteria.
If you have less than £23,250 in savings, you might be eligible for the local council to pay towards the cost of your care. However, exactly how much the council will pay depends on what care is needed and how much you can afford to pay.
Local authority funding
The first requirement is for the council to carry out an assessment to check how much help you need, called a ‘needs assessment’. If care is required, the council will then do a financial assessment or ‘means test’ to work out how much you will need to pay towards the cost of your care.
As a result of the ‘means test either’:
> the council will pay the full cost of your care
> the council will pay some of the cost of your care and you will have to top this up
> you will pay for all of your care.
If residential care is chosen (possibly link to a previous article?] then the value of the home will be taken into consideration in the financial assessment. However, if you stay in your own home the value of the home will be disregarded.
To avoid paying towards care and thus qualify for state funding, some clients may be tempted to gift their home or other capital. However, if the sole purpose for doing this is to qualify for means tested care funding, the gift will be disregarded: the local authority only need to prove that the intention of the gift was to qualify for means testing, known as ‘deprivation of assets’. Please speak to a financial adviser before taking any action in this regard.
If you need help with personal care, you may be eligible to claim certain state benefits which are not means tested:
> Attendance Allowance (AA) - available if you are over pension age
> Personal Independence Payments (PIP) – available if you are under pension age
> Disability Living Allowance (DLA) – available if you are under pension age.
The PIP and DLA can also be paid if you have walking difficulties.
If you have more complex health needs, you could be entitled to non means tested NHS continuing healthcare, for situations such as:
NHS continuing healthcare
> terminal illness or a rapidly deteriorating condition needing complex medical supervision
> unpredictable conditions where there are risks to health if care is not provided at the right time.
The care could be provided at home, in a care home or hospital or wherever you choose. The nursing care contribution is tax free and is non means tested so will reduce the amount you have to pay in fees.
NHS funded nursing care contribution
If you are unable to get NHS continuing healthcare, but still have nursing needs, you may be entitled to financial help from the NHS Nursing Care Contribution. However this is only paid to someone in a care home where they are receiving care from a registered nurse or doctor. The nursing care contribution is tax free and is non means tested so will reduce the amount you have to pay in fees.
For more information on any of the above state funding for care, please view:
Money Advice Service