The following facts will guide you through the essentials of funding residential care to suit your available budget:
Funding Fact 1:
Unless the person seeking residential care is able to afford a place in the care home of their choice, for the long-term, from their own resources, they will need to understand certain rules and regulations regarding eligibility for funding from local and national government bodies. Guidelines vary, depending on the state of the person's mental and physical health as well as their personal financial situation.
Funding Fact 2:
Local authorities are responsible for funding most people who require care in a home. However, before any decisions are made on financial matters, the local authority will arrange an assessment of the individual's care needs. Each local authority has its own criteria for determining whether a person is eligible for a place in a care home. Only if this initial assessment indicates a need for residential care should any financial questions be asked.
Funding Fact 3:
Eligibility for financial help depends on a number of factors:
If an individual does not meet the local authority's criteria for a place in a care home, there is no entitlement to funding for residential care, however poor their financial position. Nonetheless, the person might be eligible for community care.
Funding Fact 4:
Slightly different rules apply, depending on whether one is resident in England, Wales, Scotland or Northern Ireland, regarding the amount of capital and income taken into account when assessing entitlement to financial assistance. Similarly, rules vary to some extent between England, Wales, Scotland and Northern Ireland in the situation where residents of a care home are receiving nursing care; in many cases they may be entitled to have their nursing care fees paid for them. In addition, some individuals may also be eligible to have all their care fees paid by the NHS, not just the part covering nursing care.
Funding Fact 5:
When making a financial assessment, a local authority should consider only the individual's assets and income, not those of any relative. However, a spouse (but no other relative) may be asked to make a 'reasonable' contribution towards the cost of caring for the person. A local authority does not have any general right to assess a spouse's financial position. However, the authority is permitted to take court action to obtain a ruling as to what a 'reasonable' contribution should be (without causing financial difficulties to the spouse), if the parties are unable to agree.
Funding Fact 6:
If an individual can afford residential care from their own resources (or with help from family members or friends) there is no need to involve the local authority. One can simply negotiate directly with the care home of choice for suitable residential accommodation. However, it may be of benefit to consult the local authority to find out whether they would continue to fund the residential place if and when the individual's financial resources become exhausted.
Funding Fact 7:
Even though many people have capital in excess of government savings limits, they still may not be able to fund residential care using interest solely obtainable from bank or building society accounts. If this is the case, they could consider using some of their capital to fund an insurance based Care Fees plan to generate more income. Anybody interested in this possibility should consult an independent financial adviser with knowledge of this type of financial product.
To help you understand the costs of care, the funding available to you from the government and how you might be able to meet costs you have to cover yourself, you should speak to an specialist financial adviser.
Read more articles about funding long term care in our finance section and obtain the advice of the experts.
Useful sources of advice:
10 Greencoat Place,
Tel: 0845 306 0898
Help the Aged Care Fees Advice,
Tel: 0500 76 74 76
Nursing Home Fees Agency,
St Leonards House,
Tel: 01865 733000
The Relatives and Residents Association,
24 The Ivories,
6-18 Northampton Street,
Tel: 020 7359 8136