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Financing care
Learn about funding options for home care, home adaptations and care homes, together with Attendance Allowance, gifting assets and Power of Attorney.
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Guidance on the practical and emotional aspects at the end of life, from planning end of life care to arranging a funeral and coping with bereavement.

When will a local authority pay for a care home?

The first step in accessing support from your local authority is to request a free needs assessment to establish what level of care you need. 

After the needs assessment, if the council decides you have eligible needs for residential care, they will then 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 are eligible for financial support towards the cost of your care.

If you have less than a set amount in savings and assets (for example, £23,250 in England), your local council will pay some or all of the cost of a care home. Different thresholds apply in different parts of the UK.

Use our calculator to find out the cost of a care home in your area and what financial support is available.

The savings threshold 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. 

Thresholds for local authority funding – residential care, 2020/21
  Full support   Partial support Self-funder  
  less than: between: more than:
England      £14,250 £14,250 – £23,250 £23,250
N. Ireland £14,250 £14,250 – £23,250 £23,250
Scotland  £18,000 £18,000 – £28,500 £28,500
Wales £50,000 n/a £50,000
  • Full support: the local authority may cover the full cost of care if your savings and assets are worth less than the lower threshold.
  • Partial support: you may qualify for partial support if your savings and assets fall between the lower and upper thresholds (excluding Wales).
  • Self-funder: if your savings and assets are worth more than the upper limit, you will be a self-funder. In other words, you’ll have to pay for your own care.

 

Read on for more detailed information about how the thresholds are applied in each part of the UK.

 

Different thresholds apply if you will be receiving care in your own home. Find out more: Paying for home care.

 

How the financial assessment for care home fees works in England and Northern Ireland

For the financial year 2020-21, 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 have to pay the full cost of your care. If you have less than £23,250 in capital, but a weekly income that is considered high enough to cover the cost of your care, you will also have to pay all of your fees.

If you own your own home and you live there alone, its value will usually be counted as part of your capital. However, if your spouse, partner or a disabled relative continues to live in your home after you move into a care home, it’s value will usually be disregarded from the financial assessment.

 

For more on what’s included in the financial assessment, see ‘What is included in a means test for residential care?’, below

If you’re being assessed for residential care and you own your own home, its value might be taken into account

Any income contributions you are asked to make towards the cost of your care shouldn’t take your income below a set level, known as the Personal Expenses Allowance (PEA). In 2020-21 this is a minimum weekly allowance of:

  • £24.90 in England
  • £27.19 in Northern Ireland.

This money is for you to spend on personal items, such as toiletries, stationery and haircuts. 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.

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 2020-21, 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 £28,500: 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 £28,000. This is known as ‘tariff income’.
  • More than £28,500: you’ll have to pay the full cost of your care. If you have less than £28,500 in capital, but a weekly income that is considered high enough to cover the cost of your care, you will also have to pay your own fees.

As for England and Northern Ireland, if you’re a homeowner, its value will be taken into consideration unless, for example, your partner still lives there.

A weekly Personal Expenses Allowance (PEA) of £28.75 applies to care home residents in Scotland (2020-21). This is the amount of income that residents are allowed to keep for personal expenses.

In addition to the PEA, for those who are eligible a further amount will be disregarded when calculating your contribution to care home fees. This is known as the ‘savings disregard’ and in 2020/12 it is:

  • £6.75 per week for an individual
  • £10.05 for couples

This applies to residents who get pension credit and those who have a weekly income above the savings credit threshold and qualify for state-funding.

Personal care in Scotland

In Scotland, personal and nursing care is free for those who’ve been assessed as needing it. So, if you’ve been assessed as needing this kind of support, you can claim personal care payments, and possibly also nursing care payments, to contribute towards the cost of your care. For 2020-21 these payments are:

  • £180 per week for personal care
  • £81 per week for nursing care
  • £261 per week for personal and nursing care.

 

Age Scotland has more detailed advice about the financial help available to pay for care in Scotland. You can also call their helpline for information and advice.

The Age Scotland helpline offers information, friendship and advice:

0800 124 4222

Mon–Fri, 9am–5pm

The financial assessment for care home fees in Wales

In Wales, there is a single threshold for social care funding.

For the financial year 2020-21, 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 have to pay the full cost of your care. If you have less than £50,000 in capital, but a weekly income that is considered high enough to cover the cost of your care, you will also have to pay all of your fees.

If you own your own home, its value will usually be taken into consideration unless, for example, your partner still lives there.

Any income contributions shouldn’t take your income below the Minimum Income Amount (MIA), which is £32 a week (2020-21). This money is for you to spend on personal items, such as toiletries, stationery and haircuts.

What is included in a means test for residential care?

The means test will look at your capital (savings and assets) and income (any regular money you have coming in). 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 had been sold and all debts including the mortgage had been paid. If you jointly own the property, only your share will be taken into consideration.

Your home will not be included in 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
  • someone who has been your long-term carer.

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 weekly 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 not included in the means test. 

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. 

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 local authority funding 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:

1

Your local social services department should offer you a choice of care homes that accept council-funded residents and meet your care needs.

2

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.

3

If you want to move to a different 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.

4

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.

 

 

Call the Attendance Allowance helpline to request a claims form or to get help and information:

0800 731 0122

Textphone:

0845 604 5312

Mon-Fri, 8am-6pm

 

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:

 

You can appeal against the local authority’s decision.

Further reading

Care home fees

Care home fees vary across the UK. It also depends on the type of care home you are looking for and your care needs.

Paying for a care home

Explore the options for paying for a care home: local authority funding, paying for yourself or NHS support.

Self-funding a care home

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.

Last updated: 28 Oct 2020