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 50% of any jointly held assessable assets) exceeding just £23,250 (2021/2) 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 (2021/2) 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 2021/2, 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 2021/2), 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 2021/2)
b) 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 amount it would cost your Local Authority to provide or buy the assessed level of care, 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.
Should your assessable capital exceed £23,250 (2021/2) and you need to self-fund, you may wish to receive professional care fees advice and look at how much a care fees annuity might cost.
Whilst the Government has discussed ways of improving how to fund care and came close to introducing a cap for personal contributions and raising the upper Capital Thresholds to a proposed £118,000 back in 2016 these proposals were finally scrapped in 2018.
Although 2021 Queen’s Speech mentioned the Government would bring forward proposal this Parliament no deadline or details were provided. As these would still need to fully debated, it would appear as though no significant changes will happen for some time.
If you need to pay for care and would like some professional help our professional adviser Care Financial would be pleased to help. You can call them on 01476 589 565 or request an appointment below.
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 might cost, request your FREE quotes today from our specialists Care Financial.
Please note: These plans are not offered direct by the insurers
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