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Paying for a care home

We explain options for paying for a care home, from local authority support to paying yourself, known as self-funding, and NHS Continuing Healthcare.
3 min read
In this article
Who pays for care? How is a care home paid for? When will the local authority pay for a care home?
When will you be a self-funder? When will the NHS contribute to the cost of care in a care home?

Who pays for care?

 

There are more than 400,000 people in the UK living in residential and nursing care homes. Of these, almost half pay for care themselves and the rest are supported, either wholly or partly, by their local authority or the NHS.

 

How is a care home paid for?

 

Care homes are paid in the following ways in the UK:

  • The local authority funds some or all of the care, but a relative or friend of a resident can also contribute an additional voluntary fee, known as a third-party top-up fee.

  • Self-funding: the person being cared for (or their family or a friend) pays all the costs for their care.
  • In some circumstances, the NHS may also contribute to the cost of all or some of the care.
     

When will the local authority pay for a care home?

 

To decide if you’re eligible for financial support to pay for a placement in a care home, the local authority will first carry out a free needs assessment.

 

If you’re assessed as having ‘eligible needs’, the authority will next carry out a financial assessment because there are thresholds for savings and assets (known as 'capital limits for care') above which you will need to pay for care. The upper limits for a care home assessment in 2018–19 are:

  • In England and Northern Ireland: £23,250
  • In Scotland: £27,250
  • In Wales: £40,000.


Read more about the financial assessment in local authority funding for a care home.

Cost of care and eligibility in England
Use our simple tool to find out how much care might cost in England and what financial support is available.

Third-party top-up fees

If you’re eligible for financial support from your local authority, you should be offered a choice of care homes to suit your needs. If you should want to live in a different care home and you have a relative or friend who could pay the difference between what the authority will pay that care home and the fee the home charges self-funders, that person can volunteer to pay the difference, known as a third-party top-up fee.

 

Read more about this subject in third-party top-up fees.

 

When will you be a self-funder?

 

You will have to arrange and pay for a care home if you:

  • have savings and assets in excess of the capital limits for care
  • don’t qualify for local authority funding because your needs weren’t found to be sufficient following a needs assessment.


Even if you choose not to apply for financial support, it can be beneficial to get the needs assessment done because the social services will be able to explain the range of services available to meet your needs.

 

If you are a self-funder, there are several ways that you might raise money to help pay for your care.

 

 

When will the NHS contribute to the cost of care in a care home?

 

The NHS will pay all care costs in a care home under certain circumstances.

  • NHS Continuing Healthcare funds people who need ongoing health care outside of hospital if they have complex medical care needs due to disability, accident or a major illness.
  • NHS-funded Nursing Care is also available in nursing homes if you’re assessed by the NHS as needing nursing care.

 

Neither of these forms of funding is means tested.

Further reading

Care home fees

Find out how fees vary across the UK. There are also differences depending on the type of care home you are looking for ...

Last updated: 19 Sep 2018