There are various ways to fund care and it can be difficult to understand what is available and the various guidelines under which they operate. Social care is means-tested which means that only the poorest will receive financial help from the local authority, however there are various rules that control allocation of funds as well as different forms of support that cannot be charged for and aren’t means-tested.
In this article, our friends at SuperCarers outline the costs associated with assisted living depending on the type of care you choose. They’ll also explain the different funding options as well as the financial help you may be eligible for.
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Depending on your specific needs you may require different types of care.
Different options of care include:
- Full-time care
- Part-time care
- Personal care assistant
- Home care
- Nursing care
- Residential care home
- Nursing home
- Private agency
- Local authority aid
The cost of care varies considerably between the different options, with part-time, non-specialist care being much cheaper than living in a nursing home. The cost of care will also vary depending on where you live.
The decision between home care and moving into a residential home can be a hard one, especially when you want to ensure that you or your loved one receives the best quality care possible. Research suggests that people have a better long-term outcome if they receive home care, the cost of which can be more favourable. The average cost of a nursing home is estimated to be around £41,080 per year, or in the region of £790 per week (2014-2015 figures). In comparison, a full-time carer costs an average of £30,000 per year or somewhere in the region of £600-£1,000 a week.
Caring for a loved one, be it full or part-time, can be as exhausting as it is rewarding. Dedicating time to care can also present financial worries as you may not be able to work as much or your loved one’s care needs may incur certain costs. Fortunately, carers are entitled to Carer’s Allowance.
Carer’s Allowance is the main state benefit for carers and is not means tested or based on your National Insurance Record. It’s currently £61.35 a week (2016/2017) with a one-off £10 Christmas bonus. However, there’s a cap on how much you can earn and your Carer’s Allowance may be taxed if you earn above a certain amount. Whether or not you’re eligible for Carer’s Allowance also depends on the ‘overlapping’ benefit rules.
There are certain criteria that you must meet in order to be eligible for Carer’s Allowance.
The criteria are as follows:
- You must look after someone who receives a qualifying disability benefit
- You must look after that person for at least 35 hr/wk
- You’re 16 or over
- You’re not in full-time education or studying more than 21 hr/wk
- You earn less than £110 a week
- You’ve been in the UK for at least two of last three years
A full summary of each criterion can be found, with examples, at carersuk.org.
Qualifying Disability Benefits include:
- Disability Living Allowance
- Attendance Allowance
- Constant Attendance Allowance
- Personal Independence Payment
- Armed Forces Independence Payment
You may not be eligible for Carer’s Allowance if you receive more than the amount of Carer’s Allowance from one of the following benefits, as dictated by the ‘overlapping benefits rules’:
- State Retirement Pension
- Incapacity Benefit
- Maternity Allowance
- Bereavement or widow’s benefits
- Severe Disablement Allowance
- Contributory Jobseeker’s Allowance
- Contributory Employment & Support Allowance
How to claim
You can apply for Carer’s Allowance online at GOV.UK or via the post. You will require three key pieces of information:
- Your National Insurance number
- Date of birth and address of the person you are caring for
- Your bank or building society details
If your claim is unsuccessful, you can ask the Department for Work and Pensions (DWP – England, Wales & Scotland) or the Department for Communities (DfC – Northern Ireland) to reconsider the decision before you appeal – this is mandatory reconsideration. If you still remain unsuccessful you may be wish to appeal through the Social Security and Child Support Tribunal – make sure you attach a copy of the mandatory reconsideration notices.
Don't forget to register any changes in circumstance at GOV.UK.
If you’re 16 or over and under State Pension age and looking after one or more people who receive a qualifying disability benefit for at least 20 hours a week but less than 35 hours a week, you may be eligible for Carer’s Credit.
Carer’s Credit is a National Insurance credit that helps with gaps in your National Insurance Record. This ensures that you can maintain your caring responsibilities without affecting your eligibility for the State Pension. You don’t need to apply for Carer’s Credit if you already receive Carer’s Allowance or Child Benefits for a child under 12 as you automatically get credits.
Your local authority may help with costs of residential care or help you to stay in your own home by providing support for carers, home modifications, equipment, transport, and specialist services.
The help you receive largely depends on two things:
- your individual needs (assessed through a care assessment);
- how much you can afford to pay (assessed through a financial assessment)
Although your local authority may charge for certain services there are certain types of care that 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 (source Paying for care and support in England factsheet)
Care is means tested, meaning only the poorest receive help from your local authority. 57% of elderly people contribute towards their care. You must pay the full cost if you have more than £23,250 in savings (not including your home), however the value of your home may be included if you are moving to a residential home. If your capital is below £23,250 then you will partly contribute to the cost. Below £14,000 the state will fund your care but you may be expected to contribute from any income you receive above that.
Eligibility for local authority support is calculated through a care assessment. The purpose of this is to find out what your needs are, what support you require, and your circumstances. It’s good practice for individuals and their carer to be fully involved in their assessments and care planning. Likewise, it’s useful to make note of what you struggle to do on a bad day as the assessment may take place on a day when you feel particularly well and able.
If you’re assessed as not qualifying for support because your needs aren’t great enough, at a minimum, your local authority must give you information and signpost you to services and ways you might fund your care. If your needs meet the national eligibility criteria, your local authority will have to meet these needs.
The new Care Act dictates that unpaid carers have the right to further support from local authorities. As such, respite care may be provided by your local authority. This is determined by a Carer’s Assessment. Every unpaid family carer, regardless of financial circumstance, is entitled to a carer’s assessment. If you’re eligible, you can ask for a direct payment to hire a carer. Read the ‘Essential guide to the new Care Act’ to find out more.
Local authorities must provide care assessments to anyone who requests one. You can find out more about care assessments from the NHS’s guide to Local authority funding for care or via the following link – What are Community Care Assessments? To arrange a community care assessment you can contact your GP to make a referral to the local authority. Alternatively, you can contact your local authority directly or ask another person to do so on your behalf. If you’re in hospital a hospital social worker will be able to request a care assessment for you.
If your local authority believe support is needed urgently, they may begin providing services before a care-needs assessment is carried out. A full assessment will then take place as soon as possible to ensure that you receive the appropriate support.
National eligibility criteria
An adult’s needs are only eligible where they meet these three conditions:
- Arise from or are related to a physical or mental impairment or illness
- Make them unable to achieve two or more specified outcomes
- Due to being unable to meet these outcomes, there is likely to be a significant impact on their wellbeing
For more information on the Support & Needs Assessment and specific outcomes and HERE.
The BBC’s Care Calculator is a useful tool to figure out whether you qualify for local authority support and how much financial support you can expect.
For more practical guidance on funding elderly care, click here.
Once your local authority has carried out your care assessment, they will carry out a means test to work out if you need to contribute towards the cost of your care.
This will look at:
- your regular income – such as pensions, benefits, or earnings
- your capital – such as cash savings and investments, land and property (including overseas), and business assets
If you’re assessed as having to pay for all your care, you’re deemed a ‘self-funder’. You must however be left with a basic level of income. The Care Act (2014) stipulates that charges must be ‘reasonable’ and that you must be left with a basic level of income. This is calculated as the income received on Income Support or the guaranteed credit element of Pension credit, plus an extra 25%. Below this basic level you should not be charged for home care. It’s at your local authority’s discretion to decide whether or not to count severe disability premium, Disability living allowance, Personal independence payment or Attendance allowance as income.
If you’re awarded funds to pay for your care needs, the council will either provide the services directly to you, or you‘ll receive Direct Payments and arrange and pay for your care and support yourself.
Direct payments go straight into your bank, building society, Post Office, or National Savings account. You must spend the money on legitimate care needs as agreed upon in your care plan. Your care plan is based on what you want, so you’re in control.
Direct payments allow you to retain control of your own care and support services and can provide more choice in selecting products and services for your specific needs. However, you should be confident acting as an employer towards your carers and also be confident with money and paperwork or have people who can assist you with this as you’ll need to keep receipts and invoices to submit to social services on time as proof of what care you have spent your funding on.
Your local authority is only responsible for your personal care needs. Health care needs are the responsibility of the NHS. NHS continuing healthcare is a package of care arranged and funded solely by the NHS for individuals who are not in hospital and have been assessed as having a “primary health need” who require a lot of nursing support.
This package of care pays for 100% of your care fees wherever you receive your care, whether in a care home or in your own home, and helps you with healthcare needs resulting from disability, accident, or illness. If your loved one is approaching the end of their life, then a “fast track” Continuing healthcare funding assessment may be appropriate.
In England, the NHS can arrange care for you or you can choose to receive a direct payment, known as a personal health budget.
Most people with long-term care needs don’t qualify for NHS Continuing Healthcare or Care as the assessment is quite strict.
The current ‘eligible’ health needs include:
- Complex medical conditions that need additional care and support
- Long-term medical conditions
- Physical or mental disabilities
- Terminal illnesses
- Rapidly deteriorating health
- Mobility problems
- Behavioural or cognitive disorders
Despite the strict guidelines, free healthcare could save you thousands of pounds each year, so it’s essential that you find out if you’re eligible. To find out if you’re eligible ask your GP or social worker to arrange an assessment.
If you’re over 18 years old, you may be eligible for NHS Continuing Healthcare (CHC) and if you’re under 18 years old, you may be eligible for NHS Continuing Care (CC).
The Money Advice Service website provides a comprehensive guide on NHS Continuing Healthcare and how to apply.
During periods of care many people require modifications to be made to their home. Adaptive living makes your home more accessible, allowing you to complete daily tasks and also enabling you to remain in your home happily and safely. Aids and adaptations include minor things such as handrails to more complicated interventions such as level access showers and stair lifts. Beyond aids and adaptations, assistive technology, also known as telecare is widely available to improve the safety and quality of vulnerable elderly people’s lives.
Paying for assistive technology may at first seem unaffordable, however your local authority may be required to pay for it depending on your circumstances. This includes aids and minor adaptations to the home costing less than £1,000, however you may be entitled to greater funds depending on your financial situation.
When considering funding care in the long-term it is useful to discuss your options with a qualified independent financial advisor who is regulated by the Financial Conduct Authority (FCA). You should look for an advisor with the specialist CF8 qualification – this means they are qualified to advise on funding long-term care.
They will provide you with advice on the costs and risk involved with different aspect of funding long term care. They can also help with other things, such as arranging your will or a power of attorney. However, you’ll be expected to pay for this service, with fees depending on where you live, the complexity of your situation, and the level of advice and type of products recommended. Financial advisors must be clear about the type of advice they provide, whether the advice is going to be independent, and they must follow rules on how they charge.
You have rights when seeking advice. If you find that the product wasn’t suitable for your circumstances, such as being sold an investment bond with early withdrawal penalties when you were likely to need to access your money in the near future, you may have a case for mis-selling and receive compensation. To submit a complaint you should follow the formal complaints procedure of your specialist care fees adviser, however you always have the right to make a complaint to the Financial Ombudsman Service.
A specialist independent financial advisor should help you find a means of funding long-term care that is:
- Suitable for your needs
- Affordable both now and in the future
- Compatible with your attitude to risk and your financial priorities
This information and more is available at The Money Advice Service website.
There are numerous other ways that you can fund long-term care. The Money Advice Service’s guide on Funding Long-Term Care provides an excellent breakdown on the often complex system of funding care. It provides instructions on the various aspect of funding care as well as sections on a range of different payment methods not discussed in this article.
- Registered Nursing Care Contribution
- Investment bonds
- Immediate need of care fee payment plans
- Using life-time mortgage
- Equity Release Scheme
- Downsizing your home
- Deferred payment agreements
There are also some other options for funding your long-term care, including:
- Sell things you own such as art, antiques or collectables
- Cash-in savings and shares
- Rent out your home
- Check for insurance policies that could cover care costs
Before considering any of these options in order to fund your care you should consult an Independent Financial Adviser to find out which option is most suitable for you and exactly how it works.