Funding for Elderly Care

Navigating care funding for elderly care is challenging! 

As unlike NHS medical care —social care is rarely free at the point of use.

Whether it's for domiciliary (dom) care in your own home, sheltered housing or residential care in a care home.

With the cost of long-term care rising, families are frequently caught between the wish for quality support and the reality of limited financial resources.

Decisions may overwhelm even the most resilient, as you feel pulled in all directions by the emotional, mental and physical needs of your loved one.

Below I've outlined the basics of what’s available to help in the planning for long-term care.

So, let's look at what's out there for funding elderly care in the UK....

How to get Funding for Elderly Care?

It all depends on an individual's financial situation and care needs.  The main ways care is funded in the UK are....

• Local Authority (Council) Funding: The council may pay for some or all of the care costs. This is means-tested.
• NHS Funding: The National Health Service provides funding for specific health-related care needs.  This is called "NHS Continuing Healthcare (CHC) or NHS Funded Nursing Care (FNC)".
• Self-Funding: The individual pays for their own care from income, savings, or assets.
• State Benefits: Benefits can help cover costs regardless of savings.

Whichever option you finally chose your first action is to obtain a "Needs Assessment" as it's good to have an independent record of what care and support the person requires. 

Assessments are undertake free by Social Services.

To find your local Social Services look on your Council's website for the Social Services Helpline. The Helpline can then redirect you to the relevant department.  It may take a little while to get an Assessment as Social Services are stretched like many support services.

Social Services have a duty to offer everyone a Needs Assessment, regardless of their financial situation, including those who wish to self-fund. This is a legal requirement under the Care Act 2014.

They will first assess the elderly person's care needs to determine what level of support is required (eg: help at home, residential care).

Following the assessment a care plan will be produced.  It will give an indication of what level/type of care is needed (at home, extra-care, care home, nursing care, respite).

Now let's go into more detail on the options of funding for elderly care.....

Local Authority Funding

If the Needs Assessment shows that care is required, the council will then assess the person's ability to pay for it. This looks at their income, savings, and assets (including property).

This is called a Financial Assessment (or Means Test).

If a person's capital is over a certain amount called the "Capital Limits" the person is considered a self funder and must pay for their own care.

• England and Northern Ireland: The capital limits commonly used are around £14,250 (lower) and £23,250 (upper). Above the upper limit, you’re usually a self-funder.  
• Wales: The higher capital limit for residential care is commonly £50,000. 
• Scotland: There are different thresholds and contributions. Personal care is free for those who qualify, and set weekly payments are made towards personal and nursing care in care homes. 

Do check your council for their latest figures.

In England, Wales and Northern Ireland there are also important property rules.  The main residence is not included in the assessment if a spouse/partner or certain relatives (eg: over 60 or disabled) still live there.

If the person moves permanently into a care home, there’s usually a 12-week property disregard before the home’s value counts.  This means the Council will pay some of the cost towards the care home.

Do not try to give money/property away to avoid fees - as this is covered by the  “Deprivation of assets” rules. 

NHS Funding

The NHS can provide funding in two main scenarios. This funding is based on health needs, not an individual's financial situation.

• NHS Continuing Healthcare (CHC) - This is a full package of care for adults with a "primary health need" who have significant and complex health issues. If eligible, the NHS covers all care costs, including accommodation in a care home. Eligibility is determined through a detailed assessment process.
• NHS-funded Nursing Care (FNC) - If someone is in a care home that provides nursing, but they do not qualify for CHC, they may be eligible for FNC. This is a flat-rate weekly payment made directly from the NHS to the care home to cover the costs of the nursing provided.

Self Funding

If the individual is a 'self-funder', there are various ways to pay for care:

• Income and Savings - Using pensions, investments, and existing savings.
• Property -Selling a home is a common way to fund residential care.
• Deferred Payment Agreement - This is a council scheme. If the person's capital is tied up in their property.  The council can pay the care home fees on their behalf. This debt is then repaid from the sale of the property later on, after the person's death. Interest is charged on the loan.  Check your local Council's website for details.
• Immediate Needs Annuity (or Care Annuity) - This is an insurance product bought with a lump sum. In return, it provides a regular, tax-free income for life to help pay for care fees.
• Equity Release - This allows a homeowner to access the value (capital) tied up in their home. This should be approached with caution and independent financial advice is essential.

State Benefits

These benefits can be a vital source of extra income and should be claimed if eligible. 

• Attendance Allowance - For people over State Pension age who need help with personal care or supervision because of an illness or disability. It's paid at two different rates depending on the level of care needed.  This benefit is not means tested.
• Pension Credit - This is a means-tested benefit to top up the income of people over State Pension age.
• Carer's Allowance -  This is a benefit for the person providing care, not the person receiving it. If you or another family member are spending at least 35 hours a week caring for them, you may be eligible.  Unfortunately, it is not available to carers who are receiving a state pension.  There are also earning restrictions on individuals receiving a Carer's Allowance.  Check out our page covering Government Funding for Carers.

And Finally....

I hope this helps anyone seeking care for an elderly relative and will give you peace of mind when navigating the progress.

Points to remember....

• The first step for anyone is to request a free Needs Assessment. Contact Social Services through your Local Council.
• Claim All Benefits - Check your entitlement to benefit and make sure the elderly person is receiving all the state benefits they are entitled to, especially Attendance Allowance.
• Take Independent Financial Advice - This is critical, especially for self-funders. Look for a financial adviser who is a member of the Society of Later Life Advisers (SOLLA).
• Consult Organisations like Age UK and Citizens Advice offer free, impartial information and can help you navigate the system.  You can download information sheets from the Age UK website.
• Check Charities in our Grants for Adults pages as some, especially veteran and occupational charities offer funding for elderly care.
• Don’t give away assets to avoid care fees; it can backfire under deprivation rules.
• Ask for a reassessment if the needs increase as eligibility (including CHC) can change.

Now Check out the other Pages....