Whilst there is some help from the State, Local Authorities and the NHS, it is extremely limited and generally subject to means testing.
The main means test imposes upper and lower limits on the assets, including savings, investments, property, etc, you can have if you are to qualify for financial assistance.
Different limits apply to the countries which make up the UK:
Country Lower limit Upper limit
England £14,250 £23,250
Scotland £15,500 £25,250
Wales £23,750 £23,750
Northern Ireland £14,250 £23,250
So, what does this mean for you?
If you have assets below the lower limit, the cost of your care will be met in full by your Local Authority. Although a contribution may be required from you, if you are in receipt of certain state benefits or receive other income
For people with assets in excess of the upper limit, you will have to self-fund your care
If you have assets between the upper and lower limits, you will have to contribute £1 per week, for every £250 in assets above the lower limit
What assets are included?
Means testing includes most assets held in your name, more specifically:
- Money held in bank and building society accounts, including National Savings & Investments (NS&I)
- ISAs (Individual Savings Accounts) as well as other types of investments such as Unit Trusts or OEICS
- Directly held shares, gilts and corporate bonds
- Income from pensions, including the State Pension
- Property, including your own home (although there are occasions when this will be excluded, see later in this guide) as well as buy to let investments and land
Assets held jointly, will usually be split equally, before being included in the means test.
There are some assets and types of income which are excluded from the means testing, these include:
- Value of life insurance policies
- Certain compensation payments held in trust
- Some investment bonds, which contain an element of life insurance
- Residential property, subject to certain exclusions
- War Widows payments
- The mobility component of the Disability Living Allowance (DLA)
It is also likely that your Local Authority will take a close look at your financial affairs, to ensure you have not deliberately deprived yourself of assets. For example, by making large gifts, or transferring an asset’s ownership into someone else’s name, just before you need care.
A word about your home
Most people’s main fear, when it comes to paying for care costs, is that they will lose their home, or indeed have to sell it whilst their partner is still alive.
There are some occasions when your home is excluded from the means testing:
- If your spouse, partner or other financial dependent continues to live in the home
- If a relative who is over 60 and disabled continues to live in the property
- If a minor, under the age of 18, and dependent upon the person going into care, continues to live in the property
- When a carer gave up their own home to live at the property of the person now going into care; this is at the discretion of the Local Authority
Local Authorities are becoming increasingly strict, over when they will include your home in the means test calculation. Many are constantly on the lookout for occasions when they believe people have tried to gift away, or change the ownership, of their home, to deliberately reduce the value of their assets.
Some people believe there is a seven year rule, similar to that which applies to Inheritance Tax, after which time the Local Authority has no power. This is however a myth and there is no limit on the length of time that a Local Authority can look back into your affairs.
Other state help
There are a number of other smaller benefits and allowances available, these include:
Attendance Allowance This benefit is available if you require help with very basic daily functions, such as bathing or eating. It is paid irrespective of whether you live at home or need residential care and is not means tested. There are two rates, the higher rate of £79.15 per week is paid if you need round the clock care, with the lower rate of £53 per week if you need part-time assistance. Attendance Allowance payments will stop if your care homes fees are paid in full or part by the local authority
Registered Nursing Care Contribution This benefit provides a contribution to your nursing care costs and is paid directly to the home where you live. The amount you qualify for depends on where you live in the UK
Personal Expenses Allowance If you are having your fees paid for you, the Personal Expenses Allowance allows you to keep a small amount of your income, currently £23.90 per week (£24.50 in Wales), to spend on items for personal use