Paying for residential care

Most of the time you will be expected to pay for your own residential care. How much you have to pay will depend on:

  • how much capital you have, for example your savings or investments and sometimes your former home if you are in full-time residential care
  • how much money you have coming in weekly which includes any pensions or benefits.

Alternatively, find out how to pay for care in your own home.

If you have over £23,250 in capital

If you have over £23,250 in capital (which includes savings and investments) or you choose not to disclose your financial information you will not qualify for any financial assistance and then you will need to pay the full cost of your care directly to your chosen provider.

It's always a good idea to take independent financial advice when paying for a care home yourself so that you can make all the right decisions and don't risk running out of money.

How to find out if you get help with the cost of residential care

There is a process to go through to work out if we will support you with the cost of your residential care.

  1. Arrange to have a care needs assessment to understand if you are eligible to receive support from us. The assessment is free of charge.
  2. The assessment will help us to decide if you really do need to go into a care or nursing home or if there are other kinds of support available to help you stay in your own home.
  3. If the care needs assessment shows you need residential or nursing care, we will carry out a  financial assessment looking at your capital and income to calculate how much you will pay towards your care and support services. Estimate how much you may need to pay.

Financial assessment

Once we have agreed that you need residential or nursing care, we will work out how much you can pay towards the cost of it. We do this by carrying out a financial assessment which is means tested. The financial assessment may take place in your home or over the telephone.

A financial assessment looks at your capital and your weekly income to see how much you can pay towards the cost of your care.

  • Your capital includes most savings and investments, and the value of any property or land you may own or partly own, including in other countries.
  • Your income includes most pensions and benefits, and any other money you may have coming in, and an assumed level of income from any savings and investments.

If we already hold your financial information from a previous financial assessment or if your income and capital has already been verified by the Department for Work and Pensions, we can complete the financial assessment without contacting you or your representative.

We will tell you about the benefits you can claim. When we work out your contribution, we will assume you have the income from these benefits.

Some of the benefits that you may receive are affected when you move into a care home. The Department for Work and Pensions will need to know if you are in residential care, both if it is temporary or permanent. It is your responsibility to tell The Department for Work and Pensions about any change in your circumstances including hospital admissions.

After we have completed your financial assessment, we will write to you to give you information about what you need to pay.

Money or capital you have given away

If you give away money or capital assets to avoid paying for your care this is seen as ‘Deprivation of Assets’ and will mean the assessment of how much you can afford to pay will still include the value of the assets that have been given away.

We will discuss the circumstances, reasons given and timing around the giving away of the money or capital assets with you. We will decide if you could have reasonably foreseen your need for care and support at the time you gave away the money or capital assets and was it done for the sole or main purpose to reduce the amount you are charged towards your care or to be eligible for support from us sooner than expected.

In some circumstances, we can legally ask the person who was given the money or capital assets to pay some or all of your care costs.

If you have less than £23,250 in capital

Your income

We will look at your weekly income to see how much you need to pay towards the cost of your residential or nursing care. Your weekly income includes most pensions and benefits.

If you have capital between £14,250 and £23,250, we will add your weekly income to an assumed income of £1 per week for every £250 (or part of £250) over £14,250. This is called a tariff income.

Tariff income example

You have £17,250 in savings:

  • £17,250 savings minus the lower capital limit of £14,250 = £3,000
  • £3,000 ÷ £250 = £12.

This means a tariff income of £12 a week based on your savings.

Your personal expenses allowance

There will always be a small part of your income which you can keep for your personal use. This called your personal expenses allowance and is currently £28.25 per week.

In addition, both temporary and permanent residents may, in exceptional circumstances, be allowed extra allowances to cover certain housing and other costs.

The value of your home

We will not include the value of your main or only home when we look at your capital if:

  • your stay in residential care is temporary, for example it is felt you will return home after a hospital stay
  • your stay in residential care is an agreed and planned period of respite for example to give a carer a break
  • your home is occupied by:
    • your spouse or partner, including same sex partners
    • your estranged or divorced partner if they are a lone parent with a dependant child
    • a relative who is aged over 60
    • a relative who is aged under 60 and considered disabled
    • your child who is under the age of 18.

The value of any second or more properties is included in the financial assessment.

Permanent residential care stays

For the first 12 weeks of a permanent stay in residential care funded through us the value of your main or only home will be disregarded. During this period, you will still need to pay towards the cost of your residential care based on your other capital and income (excluding the value of your home).

This 12-week property disregard only applies whilst the property remains unsold. After the first 12 weeks we will include the value of your home when we work out your capital.

We do have discretion to disregard the value of your home in exceptional circumstances. We will be able to discuss this with you. You will not be entitled to a 12-week property disregard if you have been paying the care home yourself for longer than 12 weeks prior to asking for assistance with your funding from us or if you have been living somewhere else before moving into residential care.

If you own your home with someone else

Once your stay in a residential or nursing home becomes permanent, we will work out your share of the value of your home and add this amount to any other capital you may have.

For example:

  • You jointly own your home with your adult son who does not live there.
  • The total value of the house is £200,000 and you own 60% of the property.
  • Your 60% share is worth £120,000 minus 10% (this is the standard deduction for the expense of sale)
  • You are assessed as having £108,000.

If you do not agree with the figure you have the right to ask us to arrange for a specialist valuer to value your share of the property. We will arrange this and then use the figure provided to us by the specialist valuer.

If you cannot access your capital

Please read our information about deferred payments for social care if you are unable to access your capital.

Our guide to charging for residential care will help you understand in more detail how we work out what you can pay.

If you are paying the full cost for your care, our guide for people funding themselves in residential and nursing care homes gives advice about what financial issues to consider.