Will the Local Authority meet my care fees?
If the Local Authority has completed an assessment of your needs and informed you that you meet their criteria for assistance, they will then carry out a financial assessment to see how much you can contribute towards your care.
Where the financial assessment shows you have assets above the upper regional limits and this is including the value of your property, apart from a few exceptions, you will need to make your own arrangements to pay for care. The current Upper Limits for capital are £23,250 in England and Northern Ireland, £50,000 in Wales or £28,750 in Scotland.
For those with capital amounting between the lower and upper Local Authority lower limits, they will have to make a tariff income contribution of £1 per week per £250 of capital between these limits. For example, someone in England having capital of £15,250 and the English lower limit being £14,250, would mean them having to pay a tariff income of £4 per week.
The Lower Limits threshold for care are £14,250 in England and Northern Ireland, £50,000 in Wales and £18,000 in Scotland. For people with capital below these limits and who have been assessed by the Local Authority as needing care, the Local Authority will pay an amount up to their Standard Rate* for the type of care best suited to meet their needs.
The term standard rate is often used when assessing the cost of a person’s care and it refers to the amount that the Local Authority will pay towards the cost of your care and this amount could be less than the place will cost in the home that you or your family would like you to receive your care.
Circumstances when the property is disregarded
If you own your own home, the value will not be included as your capital if your partner, civil partner or former partner still occupies the property. This also applies to people in the following categories:- a relative aged over 60, or incapacitated, an estranged or divorced partner who is a lone parent or a child under the age of 16 years who you are liable to maintain. The local authority also has the discretion to ignore the property if a person lives there who gave up their home to be a carer.
Twelve Week Property Disregard
If you are a homeowner with capital less than the upper limits for your area of the UK and have been assessed as needing permanent care, the value of your home must be disregarded by the Local Authority for the first 12 weeks after you move into care. The Local Authority must assist you with payment for your care, however they will only pay up to their standard rate and all of your income apart from a small amount known as the personal expenses allowance must be taken into consideration.
Personal Expenses Allowance
The personal expenses allowance is an amount a person is allowed to keep to pay for everyday expenses. This is currently £25.65 in England, £28.01 in Northern Ireland, £28.12 in Scotland. In Wales it is now referred to as the Minimum Income Amount and is £33.99.
Third Party Top-up
In the instances where the rate paid the local authority is insufficient to cover the cost of a resident's care, it is possible for someone other than the resident to make an additional payment known as a 'top-up' to make up the difference to the care home.
There are only two instances when the resident themselves can make a 'top-up' payment themselves and these are:
- when the resident is within the 12 week property disregard period, or
- where the resident is a party to a Deferred Payment Agreement.
It is advisable to seek qualified professional advice before making any financial decisions, especially if you want to remain financially independent or perhaps leave an inheritance for your family. Paying for care is a huge financial commitment and establishing a method of meeting the costs is essential if you do not want your entire assets consumed down to the Local Authority limits. If you are in this situation, see how we suggest paying for care.
Changes to adult social care provisions from October 2023
Reforms for the changes to adult social care provisions were announced on 7th September 2021. This set out how the costs of care, the costs of daily living and the extended upper and lower capital limits would be implemented with effect from October 2023.
From October 2023 there will be a cap of £86,000 on the amount anyone will have to spend on their personal care in their lifetime.
The upper capital limit, which is the point at which people become eligible to receive some care will rise from £23,250 to £100,000 and the lower capital limit at which people do not have to pay anything for their care will rise from £14,250 to £20,000.
This sounds more generous than the previous provisions, but the devil is in the detail as the cap will not cover people’s daily living costs (DLCs) whilst they are in care, even after they have reached the £86,000 cap.
From October 2023 the cap will apply to all adults who have been assessed by the local authority as having qualifying care and support needs. This can be either new people or those who already use social care and all will start to progress towards the cap.
People must be provided with a personal budget (PB) if the local authority is going to arrange their care or an independent personal budget (IPB) if they are going to arrange their own care. The personal budget shows the cost to the local authority to provide the care a person needs and the IPB sets out what it would have cost the local authority had they met the cost of providing the care a person needed.
The Personal Budget or IPB figures are the ones that will be used to work out how the amount is arrived at to count towards the cap.
At this point it is important people know that for those whose care is paid for by the local authority, it is the amount that the individual contributes towards their costs will be the figure that goes towards the cap.
A notional figure of £200 per week has been applied nationally to represent the proportion of a person’s care fees that are not related to their personal care. This amount will be deducted from the amount representing their care which is to be carried forward towards the cap of £86,000. This cap will apply for all adults regardless of age.
Care accounts will be had by all who need care and they will be maintained by the local authority who will also be monitoring everyone’s progress towards the cap. Once a person is getting close, the local authority will contact the individual to arrange how their ongoing care needs will be met.
When applying the means test people must be left with some income after charges. Both the Minimum Income Guarantee (MIG) amount (if a person is not receiving care in a care home and the Personal Expenses Allowance (PEA) if they are, will increase with in line with inflation from April 2022.
So, in summary:
If you have assets above the upper capital limit of £100,000 from October 2023:- You are a self-funder and must pay the full cost of your care, until you have reached the cap.
If you have capital between £100,000 and £20,000:- you will pay what you can afford from your income plus a means tested “tariff” contributed from your assets. This tariff is calculated as it is currently, at the rate of £1 per £250 of assets and this is payable towards the cost of your care.
If you have capital below the lower capital limit of £20,000 from October 2023:- you do not contribute from your assets and only what you can afford from your income.
More details will emerge yet, but the Government has produced a guide on how the reforms will work so far and it is on the Gov.UK website. It can be accessed here. https://www.gov.uk/government/publications/build-back-better-our-plan-for-health-and-social-care/adult-social-care-charging-reform-further-details