When will a local authority pay for a care home?
If you need to move into a care home, your local authority may pay towards the cost of your care. However, most funding is means-tested, so it will depend on your savings, assets and income. Each of the four UK nations has its own rules for care funding, so the support that’s available also depends on where you live.
There are two steps to accessing council funded care:
- The needs assessment: The first step is to request a free needs assessment from your local authority. This will establish what your care needs are and how best they could be met.
- The financial assessment: If the council decides you have eligible needs for care, they will next carry out a financial assessment (also known as a ‘social care means test’). This will look at your capital (savings and assets) and income to work out whether you have the means to pay for some or all of your care.
If your savings and assets are below a set amount, your local authority will usually cover some or all of the costs of a care home. Different thresholds apply in different parts of the UK (see below).
Savings thresholds for care home fees
The table below shows the thresholds used by local authorities in the UK to decide who is eligible for social care funding.
|Lower threshold||Upper threshold|
- Lower threshold: if your capital (savings and assets) is below the lower threshold, the local authority may cover the full cost of your care.
- Upper threshold: if your capital is above the upper limit, you will usually have to pay for your own care.
- Between upper and lower: If your capital is between the upper and lower thresholds, you will be eligible for partial financial support, but you’ll have to cover some of the costs yourself (excluding Wales).
Below, we explain how the thresholds are applied in each part of the UK.
The financial assessment for care home fees in England and Northern Ireland
For the financial year 2021-22, if your total capital is:
- Less than £14,250: you will be eligible for maximum support from your local authority. You won’t have to contribute from your capital, but you may be expected to contribute from your income.
- More than £14,250 but less than £23,250: you will be eligible for some support, but you will have to contribute towards the cost of your care at a rate of £1 for every £250 of savings you have between £14,250 and £23,250. This is known as ‘tariff income’.
- More than £23,250: you will usually have to pay the full cost of your care.
If you own your own home and live there alone, the value of your home will usually be counted as part of your capital. But if your spouse, partner or a disabled relative is living in your home, its value will usually be disregarded from the means test.
For more information on what is and is not included in the financial assessment, see the section below: What is included in the means test for residential care?
In Northern Ireland, social care provision and funding is arranged by the Health and Social Care (HSC) Trusts, and not by local councils.
The financial assessment for care home fees in Scotland
For the financial year 2021-22, if your total capital is:
- Less than £18,000: you will be entitled to maximum support from the local authority. You won’t have to contribute from your capital, but you may be expected to contribute from your income.
- More than £18,000, but less than £28,750: you will be eligible for partial support, but you’ll have to make a contribution towards the cost of your care: £1 for every £250 of savings between £18,000 and £28,750. This is known as ‘tariff income’.
- More than £28,750: you usually won’t qualify for local authority funding to cover your care home fees. However, you may qualify for free personal care or nursing care in Scotland, regardless of your assets (see below).
As for England and Northern Ireland, if you’re a homeowner, the value of your home will be taken into consideration unless, for example, your partner, a relative aged over 60 or another dependant still lives there.
Free personal care and nursing care in Scotland
In Scotland, personal and nursing care is free for those who’ve been assessed as needing it. If you’ve been assessed as needing this kind of support, you can claim personal care and/or nursing care payments, to cover this element of your care home fees.
For 2021-22 these payments are:
- £193.50 per week for personal care
- £87.10 per week for nursing care
- £280.60 per week for personal and nursing care.
Other care home costs, such as food and accommodation charges are not covered by these payments.
Age Scotland has more detailed advice about financial support for care in Scotland. You can also call their helpline for information and advice.
The financial assessment for a care home in Wales
In Wales, there is a single threshold for residential care funding.
For the financial year 2021-22, if your total capital is:
- Less than £50,000: you will be entitled to maximum support from the local authority. You won’t have to contribute from your capital, but you may be expected to contribute from your income.
- More than £50,000: you will usually have to pay the full cost of your care.
If you own your own home, its value will usually be taken into consideration unless, for example, your partner still lives there.
How is income treated in the financial assessment?
A local authority financial assessment will look at your income, as well as your savings and assets. Even if your savings and assets are below the care funding threshold, you will usually be expected to use some of your income to pay for your care.
This includes any regular income you receive, including:
- state pension or private pensions
- other state benefits (such as Pension Credit, Universal Credit or Attendance Allowance)
- other regular income, such as rental income. Income from employment is disregarded in England and Wales.
Personal Expenses Allowance
If you receive local authority funding for a care home, you must be allowed to keep a basic amount of income, known as the Personal Expenses Allowance (PEA). This is money for you to spend on personal items, such as toiletries, stationery and haircuts. The allowance varies in different parts of the UK.
Any contribution you are asked to make must not take your weekly income below the following levels:
In Wales, this is known as the Minimum Income Amount.
In Scotland, care home residents may benefit from an additional ‘savings disregard’. This applies to people who get Pension Credit and those who have a weekly income above the savings credit threshold and qualify for state-funding. In 2021-22 it is worth:
- £6.90 per week for an individual
- £10.25 for a couple
Local authorities have discretionary powers to increase the PEA in special circumstances, such as if a person has property-related expenses or is still supporting a spouse. It’s worth checking this with your local authority when you’re assessed.
What is included in the means test for residential care?
The means test will look at your capital (savings and assets) and regular income. It includes:
The total value of your home
If you own your own home, this is the amount of money you would be left with if the property was sold and all debts including the mortgage were paid off. If you jointly own the property, only your share will be taken into consideration. Any additional properties you own will also be included in the means test.
Your home should be excluded from the means test if any of the following are still living there:
- a spouse or partner
- a close relative who is aged over 60 or qualifies for a disability benefit
- a child you are responsible for.
Your home should also be disregarded if you’re being assessed for temporary residential care. It may also be excluded from the means test if someone who has been your long-term carer is living there.
Your savings and other assets
That’s the amount of money you have, added together, minus any debts. This will include all bank and building society accounts, savings and investments, stocks and shares, and any additional properties you own. Joint accounts are generally treated as an equal split.
Your pension plan
This means any private or company pensions. If you have a spouse, half of your pension income can be passed over to them and it won’t be included in the means test.
State pension and other benefits
Most benefits you receive, such as state pension, Attendance Allowance, Carer’s Allowance and Pension Credit, will be taken into consideration in a financial assessment. A few benefits, such as Winter Fuel Payment and the mobility component of Personal Independence Payment (PIP), are disregarded.
Make sure you’re claiming all your benefits and entitlements - see our guide to benefits for older people. The means test will automatically assume you are receiving everything you’re entitled to, even if you aren’t claiming them.
Some assets are excluded from the means test, such as personal possessions and the surrender value of any life insurance policies.
Rules for couples
A person being assessed for residential care should be treated as an individual. If you’re married or living with a partner, only the income of the person needing care can be taken into account in the financial assessment.
If you have any shared savings, consider splitting them into separate accounts so it’s easier to see who has what for the purposes of the financial assessment and paying for care in general. Be warned, however, that there are rules about ‘giving away’ assets – see gifting assets and property.
If you have a private or occupational pension and have a partner still living at home, 50% of your pension will be disregarded from your income assessment.
Fortunately, we found a care home that we liked and also accepted the local authority rate, which eventually the social services confirmed they would pay.
What is the 12-week property disregard?
If your savings are below the threshold for care funding but you own your own home, the council will disregard the value of your property for the first 12 weeks after you move into long-term residential care.
This may enable you to qualify for financial support for your first 12 weeks in a care home, even if you will be self-funding after that period. This can provide some much-needed time to make important financial decisions.
What happens next?
After the financial assessment has been completed, you should be provided with written information from the local authority detailing how the charges are worked out, and what you’ll need to pay.
If you qualify for help with care costs:
Your local social services department should offer you a choice of care homes that accept council-funded residents and meet your care needs.
If there are no suitable care home places available within the budget set by the council, they should increase the budget to ensure you move to a care home that meets all your assessed needs.
However, it’s important to understand that this will only apply to needs that were identified during your needs assessment and recorded up front in your care plan. The council won’t increase its budget to meet other non-assessed needs.
If you want to move to a care home that costs more than the local authority is willing to pay, a relative or friend could volunteer to pay a top-up fee. This is the difference between what the care home of your choice charges to a self-funder and the amount the local authority will pay.
Read more about care home top-up fees.
If you’ve been receiving Attendance Allowance, you’ll need to inform the benefits office once you move into a care home and let them know that the local authority is contributing to the cost of your care. Attendance Allowance will then cease for as long as you are receiving care funding. If you fail to inform the relevant office, you’ll have to repay what has been paid.
Read more about how moving into a care home affects your benefits and pensions.
If you don’t qualify for help with costs:
You’ll be looking to self-fund your residential care. See our guidance on self-funding a care home for tips on how to cover the costs.
Even if you don’t qualify for financial support, you’re entitled to ask the local authority for help with arranging suitable care.
The support they can offer will depend on your circumstances. For example, they could provide advice on your options, recommend suitable providers, or help to arrange a contract with a care provider. However, you may be liable to pay an arrangement fee for this support, as well as any care costs that will be incurred.
If you are unhappy with the assessment:
Care home fees vary across the UK. It also depends on the type of care home you are looking for and your care needs.
We explain how to cover the costs of a care home if you are a self-funder, and what happens if your money runs out.
Download our simple guide to paying for care. It explains different ways to fund care and how to get financial support.