Even if you’ve paid National Insurance contributions all your life, you might have to pay towards the cost of your long-term care. Read our guide to find out how the costs are worked out and whether you’ll have to pay.
- Working out who is going to pay for long-term care
- How a means test works
- If you’re a home owner
- Means tests for different types of care
- Do you have to pay towards your partner’s care costs?
- Why where you live affects how much you pay for care
- Getting rid of assets to avoid paying for care
- Why it’s important to get a care needs assessment
Working out who is going to pay for long-term care
National Insurance contributions go towards things like your State Pension but they don’t count towards the costs of social care.
This type of care is managed by your local authority, so you have to apply directly to them if you need help with paying for long-term care.
Your local authority (or Health and Social Care Trust in Northern Ireland) will first carry out a care needs assessment to find out what support you need.
The next step is to work out who is going to pay. Your local authority might pay for all of it, part of it or nothing at all.
Your contribution to the cost of your care is decided following a financial assessment, called a means test.
Find out more about the local authority care needs assessment.
How a means test works
The means test looks at:
- your regular income – such as pensions, benefits or earnings
- your capital – such as cash savings and investments, land and property (including overseas property), and business assets
If your income and capital are above a certain amount, you will have to pay towards the costs of your care.
If you’re a home owner
If you own your home, the value of it might be counted as capital after 12 weeks if you move permanently into a care home.
However, your home won’t be counted as capital if certain people still live there.
- your husband, wife, partner or civil partner
- a close relative who is 60 or over, or incapacitated
- a close relative under the age of 16 who you’re legally liable to support
- your ex-husband, ex-wife, ex-civil partner or ex-partner if they are a lone parent
Your local authority or trust might choose not to count your home as capital in other circumstances, for example if your previous carer lives there and they give up their home to care for you.
If you move into a care home and decide to rent out your property its value is treated as capital but the rental income is ignored as income but could be paid to the local authority to reduce your debt if you are participating in a deferred payment agreement.
Means tests for different types of care
Care home means test
If you’re moving into a care home and have more than the amounts shown in the table below, you’ll usually have to pay all the care home fees.
This threshold includes the value of your home unless your partner or another dependant still lives there.
If the means test reveals the local authority should pay for your care home place you will have to contribute all of your income less a small amount of money you are allowed to retain for personal expenses.
Care at Home means test
You can be charged for home care services if you have more than the amounts shown in the table below.
The value of your home is not taken into account when working how much you have to pay.
Each local authority should publish and make available details of its charging policy for home care, how they work out how much to charge you and how much as a minimum income you are allowed to keep for your own use.
Do you have to pay towards your partner’s care costs?
Your savings are not taken into account if it’s held separately. However, if it’s in a joint account with your partner who needs care it might. Some people split money in advance of their financial assessment to avoid this.
Doing so can result in not having to spend as much on care if, the person going into care has savings over the limits above.
If you do decide to split money, in law you each own half of a joint account, so splitting the money in half would be appropriate.
Here is an example for England:
If a couple have £50,000 in a joint account and one of them goes into a care home.
Then the person in the care home is assessed as owning half of this £25,000. (50% of £50,000).
This is £1,750 above the upper capital limit (£25,000 – £23,250).
So, £3,500must be spent from the joint account before the overall total falls to £23,250 (50% of £46,500) for their half.
In this case splitting the money in advance would mean they only need to spend £1,750 instead of the £3,500. And their partner keeps their £25,000 intact. The potential savings would be larger if you are further over the savings limit.
Why where you live affects how much you pay for care
The maximum amount you have to pay towards your care is different, depending on where you live in the UK.
The cost of living in residential care can be split into:
- your care costs
- the hotel costs, including the cost of accommodation and food
The cost of care differs around the United Kingdom.
The cost is usually higher where employment costs and properties are more expensive.
In Scotland, you receive a personal care contribution towards your personal care costs if you’re over 65.
You can find out how your local authority charges for the care services.
Find your local council on the GOV.UK website
If you’re in Northern Ireland, find your local Health and Social Care Trust on the nidirect website
Getting rid of assets to avoid paying for care
“Dad was really worried he’d have to sell the house when Mum went into care for her Alzheimer’s. But because he was still living in the family home, the council didn’t include it in their calculations.” – Fiona
Sometimes, a person deliberately transfers investments or a property’s title deeds to someone else, such as a family member, so they can fall below the threshold and avoid paying the full cost of their care. It’s called deprivation of assets.
However, doing this doesn’t necessarily mean those assets won’t be taken into account in a means test. The local authority is likely to treat you as if you still have the assets. This is called ‘notional capital’ and you would not be entitled to support until you have paid sufficient care costs to have depleted notional capital to the means test threshold.
Another consideration is whether the care home the local authority is prepared to pay for be would be as nice as the one you would choose if you’re paying privately.
If you have savings and capital and you want to work out the best way of paying for care, you should get advice from an independent financial adviser.
- if you’re living in England, download a fact sheet about deprivation of assets and the means test on the AgeUK website.
- if you’re living in Wales, find out more about deprivation of assets and the means test on the AgeUK website.
- if you’re living in Scotland, download a fact sheet about transfer of assets and the means test on the Age Scotland website.
- if you’re living in Northern Ireland, contact AgeUK NI to find out more about deprivation of assets and the means test.
Why it’s important to get a care needs assessment
Even if you believe your care needs aren’t important enough or your income and savings are too high to get help with funding, make sure you get a care needs assessment.
It is also important if you think your capital might soon fall to the level where you would be supported. In which case you should ensure you are receiving the care you are assessed as needing and the local authority would be willing to pay for when the time comes. Or, if in a care home, they would continue to accommodate you at local authority rates.
The assessment will give you the chance to discuss your needs with a health or social care professional who can advise you on what help is available.
For further free independent help regarding this you can call FirstStop Advice on: 0800 377 7070 (Monday to Friday, 9am – 5pm).
Or email them at: [email protected].
Read our guide on How a local authority needs assessment works
This article is provided by the Money Advice Service.