Money and costs
The care system can seem complicated, and funding in particular.
Here are some basic rules of thumb to help you get started. We’ve covered this in two sections, since there are differences between Local Authority and NHS funding.
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Note that much of this information is for England. If you need support for issues in Scotland, Wales or Northern Ireland, please contact our adviceline.
Local authority funding
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Most people who receive help with their fees will get this from their local authority under the Care Act. This is means tested support, so it is linked to what you can afford.
As a general rule, if you meet the eligibility criteria for a care home placement and have assets of £23,250 or less, then you will be eligible for support for your care home fees.
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Remember, it is just your assets that should be considered in the financial assessment. So, the assets of your partner or spouse do no come into it.
The exception to this is when couples have arranged their finances so that they have shared savings in just one name.
If this applies to you and you need care, then those joint savings should be split equally with your spouse or partner who remains at home.
If your move in to care is temporary; or if you have a family member aged 60 or over; or a spouse or partner living in the property; then the value of your home should be excluded from any funding assessment.
Your property should also be disregarded for the first twelve weeks of becoming a permanent resident in a care home.
These are the most common disregards, but there are others. For more information contact our Helpline, or see Age UK’s factsheet on Property and Paying for Residential Care.
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Your local authority is allowed to set rates for different levels of care as a guide to help them set their annual budgets. However, the funding set for your care should always be sufficient to meet your assessed needs. It is really important to ensure that your care and support plan records your needs correctly.
When setting the rate for your care, the local authority must be able to offer you at least one care home placement that is both:
• Available and;
• Able to meet your needs.
Don’t forget that maintaining family relationships is an eligible need, and if this is important to you, then the location of the home is relevant. It should be within reasonable reach of the people important to you, to support these relationships.
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The budget set by your local authority is not the sum they pay. The Care Act requires your local authority to make a contribution towards your care. The amount will depend on your income and capital assets and whether you are a moving into a care home permanently or for a short stay.
The amount the local authority will pay is your budget less your contribution.
As part of your assessment, you should receive:
• Information as to how your contribution is calculated
• a breakdown of how they calculated your contribution
• how much you should pay and the process for making payment.
This information should all be provided prior to you receiving care, or as soon as possible after you move in. The local authority should provide clear information about care home placement funding as soon as it is clear that you need this support and prior to the completion of your assessment, so you are not faced with an unexpected bill.
If these details are unduly delayed, then an attempt by the local authority to backdate your contribution may be in breach of the Care Act.
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You may prefer to live in a home different than the one/s offered by your local authority. If you or someone you know is able to meet the additional costs, then you are entitled to move to the home of your choice. These are called ‘top up’ fees.
For a short amount of time, you may be able to fund your own top up fees, for instance, during the 12-week period when your property must be disregarded from your financial assessment by the local authority. But in most cases, this will need to be a third person (often referred to as ‘third party top up’).
Bear in mind that the top up amount is likely to rise more quickly than the local authority’s contribution, so should not be taken on lightly.
Neither you nor a third party should ever be asked to pay:
• because there are no placements available at the budget set for your care
• or to meet your eligible needs, such as living close to family to maintain relationships, or meeting religious or cultural needs
The provider should never seek to enter into a separate arrangement or contract for fees outside of the contract with the local authority.
This is not just against the Care Act, but can leave your family member or friend open to paying more than they should.
The contract between the provider and local authority should be for the full fees, including agreement of whether the top up fee is to be paid to the local authority or direct to the provider.
If you have been asked to pay top up fees and not sure if you should, it may be helpful to contact our Adviceline.
Trevor, our Senior Care and Support Adviser, explains third party top-ups.
NHS Funding
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If you are moving into a nursing home, then make sure that you are assessed for Funded Nursing Care.
Similarly, if your mental or physical health needs are particularly high, complex or unpredictable, make sure you have been assessed for Continuing Health Care Funding.
These are types of NHS funding paid direct to the care home, but specifically allocated for your care.
The assessment process for both types of funding is the same. If you apply for Funded Nursing Care, you should be considered for Continuing Health Care funding, and visa versa.
Your GP, social worker or care home manager should be able to apply on your behalf, but you can also ask for an assessment yourself. Beacon is a non for profit organisation that can also help advice you on how best to apply for Continuing Health Care funding and advocate for you at a cost. There are also many other companies advertising this service.
The Continuing Healthcare team should be located in your local Integrated Care Board. These were previously known as Clinical Commissioning Groups.
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If you pay for all of your fees, and are either moving in or currently living in a nursing home, then you should be assessed for Funded Nursing Care (FNC), which is a contribution towards the cost. This type of funding reflects the fact that you are, in effect, paying for private health care, which would have otherwise been provided by the NHS, through your fees, due to the home employing nurses.
However, whether you receive FNC or not, you are still eligible for support from the NHS.
If you pay for all of your care and are a self funder, your contract should state how these payments are treated, and they should form part of your care home fees.
The provider should be able to give you any information about this, including details of the support they provide you that is related to the payment. This information should be available before you move in.
If you are supported by your local authority, your social worker should arrange the referral for you. If you are awarded FNC, this doesn’t reduce the amount you pay towards your care, but it will reduce the amount paid by the local authority.
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If you are awarded Continuing Health Care (CHC) funding, then the NHS will fund your care. This usually involves either taking over the contract for your care with the home, or arrange with you a suitable placement, depending on your preference, and whether your current home is able to meet your needs.
You can also ask to receive your CHC funding via a ‘Personal Health Budget’. You can use this to arrange your own care or request a third party manages it on your behalf. This can include having care in your own home. Your CHC team should be able to give you advice and support on how to arrange this, if you wish to explore this option.
There are situations where you can be ‘fast tracked’ onto CHC. This means that your placement will be covered by CHC funding until an assessment can be arranged. Then if the assessment finds you are eligible, you will continue to receive it. This is usually for people who are in the final months of life with complex needs.
CHC is usually awarded for a period of anything between 3 to 12 months before being reviewed.
If you believe you have been wrongfully turned down for CHC funding, or would like to know more about it, please get in touch with our helpline. Alternatively, Beacon is a non for profit organisation specialising in CHC funding and provides free advice. They can also advocate on your behalf for a fee.
Care Home Providers
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Whether you receive help towards your care home costs or not, care providers have a duty to make sure you have important information about their services to ensure you make informed decision. If you are responsible for meeting the full costs of your care, often referred to as self-funders, providers have additional responsibilities towards you to ensure that you are fully informed of the care you are purchasing, and the costs involved. This information should be set out in easily accessible language and be provided before you move into the care home. The Competition and Markets Authority has produced a Care homes guidance to care homes setting out their responsibilities, but it is also very helpful for people looking for care.
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Whether you are visiting a care home in person, ringing or emailing for information, providers should ensure that you have key information about their services. This includes:
. This includes:
• Whether you accept self-funded and State-funded residents including:
o An overview of what the fees for each type of service offered
o What services are provided within those fees.
• Highlighting particularly surprising or important terms and conditions such as:
o Any requirement for self-funders to demonstrate that they can pay for their own care for a minimum period of time.
o How self-funded residents’ fees may change during their stay.
o When the resident might require a ‘guarantor’ for their fee payments
o Deposits required and how and when they might be paid back
• Services and costs not included in the main fees whether you are self-funding your own care or receiving support. This should highlight those cost that may be significant such as:
o Cost of accompanying you to medical appointments
o Arrangements and costs of accessing a dentist, optician
o Use of any services not included in the fees, such as hairdressing and shop.
• The type of care needs provided for
• An overview of the rooms, facilities and services available to residents.
• The size of the home (eg how many beds it has).
• A brief description of your staffing arrangements.
However you receive this information, including on the providers website, the information should always be accurate and never misled. For instance, a care home should never state that they have daily activities or an activity coordinator when this is not the case. If something is important to you, it is best to ask the provider to put this in writing to you so that there is no confusion later on.
If the home has been identified for you because you are receiving financial support from your local authority or through the NHS Continuing Healthcare funding, the care provider must still ensure that you have all the relevant information, including costs of ‘extras’ before you move in.
Some people will move in on a temporary basis and become permanent residents, or will move from being supported by a local authority funding to self-funding and visa versa. Your provider should make sure you have any information relevant to this in a timely fashion, so you can make the right choices.
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Once you have identified the home you wish to move into or shortlisted, then they should provide you with a copy of the contract terms. Or if you are being funded by the local authority or NHS, a copy of the agreement terms which should reflect the contract terms between the statutory body and the provider.
You should have a copy of these by or before the provider assesses your needs.
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If you are a self-funder, your contract with the provider must set out clearly when and how fees can be increased.
These terms and any increase of fees must follow consumer law. According to the CMA, fee increase terms should include:
o How often and when your fees will be increased, usually once a year.
o How the increase is calculated such as linking the increase to the Consumer Prices Index
o A minimum of 28 days notice of the intended increase
The Competition & Markets Authority have set out guidance to providers as to what are and what are not fair (and therefore, legal) contract terms.
This content last checked and updated: August 2023