Paying for care is means tested. If you do not qualify for free care under HNS Continuing Care and need care in a care home, your Local Authority has a duty to financially assess you to see whether you need to pay for your own care or not - the so called Means Test.
Local Authorities in England will only provide maximum funding for those who pass a means test and are deemed by them to need care.
Currently those living in England, with personal capital assessable assets and (and ½ of any jointly held assessable assets) exceeding just £23,250 (2018/19) have to pay for all of their own care (unless they qualify for free NHS Continuing Healthcare) and this is when professional long term care advice becomes so important as we are able to help you understand all your funding options, benefit entitlement and provide you with impartial long term care planning.
Only those currently below: £14,250 (2018/19) qualify for the maximum Local Authority rate, often known as the standard rate or contractual rate. This rate varies from one English local authority to another and is based on what the Local Authority can agree with some care homes. Consequently the rate provided may be insufficient to pay for the care required in a majority of care homes. Indeed it may not even be sufficient to pay for some local authority run homes.
Even where you do qualify for the maximum local authority funding, it’s not provided free. The Local Authority will take all your income (including most state benefits), except what is deemed adequate to meet your personal needs – the so called Personal Expenses Allowance (currently, £24.90 per week 2018/19), plus if you are over 65 and getting Savings credit, either £5.75 per week (if single) or £8.60 per week (if a couple) (England) (2018/19) Pension Savings Disregard (and if you are married or have a partner who needs some of your pension to continue living at home - 50% of any private pensions you receive), to help reimburse them for the fees they pay on your behalf.
If your capital falls in between the upper and lower capital thresholds (£23,250 & £14,250 in 2018/19), any capital greater than £14,250 gets converted into additional “notional or tariff income” at the arbitrary rate of £ 1 per week additional income, for every £250 of capital greater than £14,250.
This is then added to any actual income received (including most benefits, or any which you could be entitled to if you claimed them), but excluding:-
a) your Personal Expenses Allowance (currently, £24.90 per week 2018/19)
b) if you are over 65 and getting Savings credit - either £5.75 per week (if single) or £8.60 per week (if a couple) (2018/19) Pension Savings Disregard and
c) if you are married or have a partner who needs some of your pension to continue living at home - 50% of any private pensions you receive).
The resulting assessable income is then compared to the actual cost of care. If your combined weekly income figure exceeds the cost of care, once again you would need to pay for your own care until your capital reduced to such a level as your total assessable income didn't meet the cost of care.
If your total assessable income is less than the maximum rate your Local Authority is prepared to pay, the local authority funds the difference. Please remember, however, that a) this maximum rate may still not be sufficient to meet the full cost of your chosen care and b) it doesn’t mean it’s free you would still be expected to pay them all of your income except the Personal Expenses Allowance and 50% of any private pension but only if you need to and do pay this, to a spouse or partner to live on.
If the care you want, or is currently being received, is more than the maximum Local Authority rate other family members will need to pay the difference or find a care home willing to accept just the local authority’s rate.
Clearly then should your assessable capital exceed £23,250 (2018/19) and you need to self-fund, to ensure money doesn’t run out and that your chosen care can continue indefinitely, you should seek professional care fees advice form a SOLLA accredited specialist like ourselves and enquire as to how much a care fees payment plan or annuity might cost.
When the Government introduced the Care Act in 2015 they also intended making changes in 2016 to how much English people would need to pay for their own care including proposing to bring in a so called Care Cap on personal contributions and raising the upper Capital Thresholds to a proposed £118,000.
These have now been scrapped with the government announcing they would bring forward a new Green Paper on funding of LTC in autumn 2018. This is still to be published and being a Green Paper it will only be a discussion document so may still take many years to be implemented.
If you are responsible for funding someone’s care and would like to receive the very latest, up to date information on paying for care complete our contact form or call us today on FREEPHONE 0800 180 4336.
If you need to pay for your own care, a care fees annuity will not only offer tremendous peace of mind, but will also enable your parent or relative to continue receiving the care they deserve.
To discover just how much a care fees annuity would cost, request quotes today by providing us with your details here.
Please note: These plans are not offered direct by the insurers
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