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 long term 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 (2016/17) 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 (2016/17) 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 2016/17), 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) (2016/17) 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 2016/17), 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 2016/17)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) (2016/17) 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 (2016/17) 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.
The Government has already agreed a number of proposals that they intend to implement in England only from April 2020. These include raising the upper capital threshold from the current £23,250 to an expected £118,000 and capping the amount any individual has to pay for their own care to and assessed £72,000. However, if they implemented along the same lines as outlined, they may still not benefit you greatly. To find out more about how these changes may or may not affect you visit our new page Care Act and what it means for LTC in England.
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 01476 403537.
If you need to pay for your own care a care fees funding plan can be a great way of avoiding running out of money and securing your care.
Find out for yourself just how affordable a care fees funding plan could be. Get you free market comparison from ALL providers easily by completing your details here and one of our advisers will call you back to discuss them.
Please note: These plans are not offered direct by the insurers
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