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Paying for care and support in England FAQ

On the Carers UK Adviceline we receive lots of questions about when the local council might help with the cost of care and support.

If the person you are looking after is assessed by the local council as needing care and support, the local council will carry out a financial assessment to work out whether they need to help with the cost. Below you’ll find the answers to some of the most commonly asked questions on this topic, including a question which has been raised following the recent election.


Q: How do the local council work out if the person I am looking after has to pay for any care and support they get?

A: If the person you are looking after is assessed by the local council as needing care and support, the local council will carry out a financial assessment to work out:

  • Whether the person has to pay the full cost of any care and support themselves (called a ‘self-funder’).
  • Whether the person has to pay a contribution towards the cost of any care and support and the local council will pay the rest.
  • Whether the person doesn’t have to pay anything towards the cost of any care and support and the local council have to pay the full amount.

The local council will carry out the financial assessment in the following way:

Step one: they decide what care and support to provide and how much this will cost (called a ‘personal budget’).

Step two: they check if the person has capital above a certain amount (their capital and half of any joint capital).

  • The upper capital limit means that if the person has capital over this amount they will pay the full cost of any support - for 2017/18 the figure is £23,250.
  • The lower capital limit means that if the person has capital below this amount it should be ignored - for 2017/18 the figure is £14,250.
  • If the persons capital is between the lower and the upper limits, £1 a week for every £250 over the lower capital limit is taken into account as income (which is called ‘tariff income’) - for example if the person has capital of £4,000 above the lower capital limit, £16 a week will be taken into account as ‘tariff income’.
  • The value of the home the person lives in won’t be taken into account as capital if the care and support is home based (ie not residential care) but will sometimes be taken into account if the person is going into residential care – for further information visit Q: If the person I am looking after owns their own home, will they have to sell their home to pay for care and support?.

Step 3: they work out how much income the person has coming in (their income and half of any joint income).

  • When deciding how much income the person has, only some income is taken into account, certain types of income are always ignored including: earnings; the mobility component of Disability Living Allowance (DLA) and the mobility component of Personal Independence Payment (PIP).
  • They can treat disability related benefits such as the care component of DLA, the daily living component of PIP or Attendance Allowance into account as income, however if they do, they should deduct any ‘disability related expenditure’ – for further information visit Q: Are disability benefits such as Disability Living Allowance (DLA), Personal Independence Payment (PIP) or Attendance Allowance taken into account in the financial assessment?.

Step 4: to ensure that the person has enough money to live on the local council has to leave them with a protected amount.

  • For support which is home based (ie not residential care) this protected amount is called the Minimum Income Guarantee (MIG) which is equivalent to Income Support or the Guarantee Credit element of Pension Credit (plus any relevant premiums excluding the severe disability premium) plus a buffer of 25% - the amounts which the MIG is made up of are outlined in a local authority circular.
  • For residential care this protected amount is called the Personal Expenses Allowance (PEA). It is normally a set amount, but which can be increase in certain circumstances – for 2017/18 the PEA is £24.90 a week.

Step 5: if the person has income (including ‘tariff income’) above their protected amount, this is the amount they will have to pay (up to the actual cost of the care and support).


Example of the financial assessment for home based care and support

Mrs Jones is 70 years old, and lives alone. Mrs Jones is assessed by the local council as needing a care worker for an hour a day, seven days a week.

  • Step one: The local council decide that the cost of this care and support is £105 a week (so the ‘personal budget’ is £105 a week).
  • Step two: Mrs Jones has capital of £20,000 which means that she has £23 a week ‘tariff income’.
  • Step three: Mrs Jones has a State Pension of £100 a week and gets Pension Credit of £39.35 a week.
  • Step four: Mrs Jones’s MIG is £189 a week.
  • Step five: Mrs Jones’s total income is £162.35 a week (£23 ‘tariff income’ + £100 State Pension + £39.35 Pension Credit). Her income is less than her protected amount (which is her MIG of £189 a week) which means she does not have to pay anything towards the cost of this care and support.

Example of the financial assessment for residential care

Mrs Jones is 70 years old, and lives alone in a rented house. Mrs Jones is assessed by the local council as needing residential care.

  • Step one: The local council decide that the cost of this care and support is £600 a week (so the ‘personal budget’ us £600 a week).
  • Step two: Mrs Jones has capital of £20,000, which means that she has £23 a week ‘tariff income’.
  • Step three: Mrs Jones has a State Pension of £100 a week and gets Pension Credit of £39.35 a week.
  • Step four: Mrs Jones’s PEA is £24.90 a week.
  • Step five: Mrs Jones’s total income is £162.35 a week (£23 ‘tariff income’ + £100 State Pension + £39.35 Pension Credit). Her income exceeds her protected amount by £137.45 a week (£162.35 - £24.90) which means this is the amount she has to pay towards the cost of this care and support and the local council would pay the remaining £462.55 a week.
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Q: Are disability benefits such as Disability Living Allowance (DLA), Personal Independence Payment (PIP) or Attendance Allowance taken into account in the financial assessment?

A: The mobility component of DLA and PIP cannot be taken into account as income.

The care component of DLA, the daily living component of PIP and Attendance Allowance can be taken into account as income; however if the local council do so they have to deduct any ‘disability related expenditure’ (DRE).

Examples of DRE could include:

  • laundry and specialist washing powders
  • special dietary requirements
  • special clothing or footwear
  • extra bedding (eg because of incontinence)
  • extra heating or water costs
  • garden maintenance, private cleaning or domestic help, if needed because of disability and not provided by social services
  • privately arranged care services, including respite care
  • the purchase, maintenance and repair of disability related equipment

Example

Mr Khan receives the enhanced rate mobility component of PIP (£58 a week) and the standard rate daily living component of PIP (£55.65 a week).

When the local council carry out a financial assessment on Mr Khan they cannot take the mobility component into account as income; however they can take the daily living component into account as income once they have deducted any DRE.

Mr Khan’s DRE is £10 a week for extra heating and water costs because of his health condition, and £5 a week for special clothing which he needs because of his health condition. This totals £15 a week DRE. This means that the amount of the daily living component that can be taken into account as income is £40.65 a week (£55.65 daily living component - £15 DRE).

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Q: Does the same financial assessment apply to aids or adaptations?

A: If the person you are looking after is assessed as needing aids or minor adaptations (which means adaptations which cost £1,000 or less) then these should be free of charge, regardless of any income/capital they might have.

If the person you are looking after is assessed as needing more major adaptations (which means adaptations which cost over £1,000) then these wouldn’t generally be provided as part of their care and support plan. Instead they could look into applying for a Disabled Facilities Grant (DFG).

A DFG is a means-tested grant from the local council of up to £30,000 which can help with the cost of adapting a property for the needs of a disabled person. Examples of adaptations which a DFG could help with include: widening doors and installing ramps; and improving access to rooms – ie a stairlift or a downstairs bathroom.

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Q: If the person I am looking after cannot afford the care and support they want, will I have to help with the cost?

A: In short, no. You as the carer cannot be charged for services for the person you are looking after, even if you are there partner. Also, your income/capital cannot be taken into account as part of their financial assessment.

However, if the local council have assessed the person you are looking after as needing care and support, they can meet these care and support needs in the most cost effective way. It would be the most cost effective amount which would be the ‘personal budget’ figure when they carry out the financial assessment.

This means that in some situations, the cost of the care and support that the person you are looking after actually wants exceeds the cost of the ‘personal budget’ the local council are using, which means there will be a shortfall.


Example

Mrs Ricci is 85 years old, and lives alone in a rented house. Mrs Ricci is assessed by the local council as needing residential care. The local council contracts with a local residential care home which would meet Mrs Ricci’s needs and which costs £600 a week. However Mrs Ricci has found another residential care home which she prefers and which costs £700 a week. As the local council can meet Mrs Ricci’s needs in the most cost effective way, they could use the amount of £600 as the ‘personal budget’.

The local council carry out a financial assessment on Mrs Ricci:

  • Step one: The local council decide that the cost of this care and support is £600 a week (so the ‘personal budget’ is £600 a week).
  • Step two: Mrs Ricci has capital of £20,000, which means that she has £23 a week ‘tariff income’.
  • Step three: Mrs Ricci has a State Pension of £100 a week and gets Pension Credit of £39.35 a week.
  • Step four: Mrs Ricci’s PEA is £24.90 a week.
  • Step five: Mrs Ricci’s total income is £162.35 a week (£23 ‘tariff income’ + £100 State Pension + £39.35 Pension Credit). Her income exceeds her protected amount by £137.45 a week (£162.35 - £24.90) which means this is the amount she has to pay towards the cost of this care and support and the local council would pay the remaining £462.55 a week (to make the total payments up to £600 a week).

This leaves a shortfall of £100 a week if Mrs Ricci wants to move into her preferred residential care home which costs £700 a week.


In this situation it is possible for a third party to make a ‘top-up fee’ to make up the shortfall. However this should be completely their choice and the person making the ‘top up fee’ should make sure that this is sustainable in the long run.

Therefore to answer the question, there should never be a situation where you are forced to pay for the care and support of the person you are looking after, however there may be a situation when you choose to help with the cost.

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Q: If the person I am looking after owns their own home, will the value of their home be taken into account in the financial assessment?

A: If the person you are looking after owns the home they live in, the value of the home won’t be taken into account as capital if they are getting care and support at home (ie not residential care).

If the person you are looking after owns the home they live in, the value of the home won’t be taken into account as capital if they go into temporary residential care as long as they intend to return to the property or are taking reasonable steps to dispose of the property in order to buy another more suitable property to return to.

If the person you are looking after owns the home they live in, the value of the home can be taken into account as capital if they go into permanent residential care, unless a disregard applies. There are some mandatory disregards (which means the local council has to apply them) and there are some discretionary disregards (which means the local council can decide whether or not to apply them).

A mandatory disregard will apply if the person you are looking after no longer occupies the property (because they are in residential care), but the property is occupied as the main or only home of any of the people listed below (as long as this was also the case before the person went into residential care):

  • the person’s partner, former partner or civil partner (except where they are estranged)
  • a lone parent who is the person’s estranged or divorced partner
  • a relative of the person or a member of the person’s family who is either:
    - aged 60 or over
    - is a child of the person aged under 18
    - is incapacitated

Note: A relative is a: parent (including an adoptive parent); parent-in-law; son (including an adoptive son); son-in-law; daughter (including an adoptive daughter); daughter-in-law; step-parent; step-son; step-daughter; brother; sister; grandparent; grandchild; uncle; aunt; nephew; niece; or the spouse, civil partner or unmarried partner of any of those mentioned up to and including sister.

Note: Incapacitated is not closely defined, but it would be reasonable to assume that a relative is incapacitated if they are receiving one of the following benefits: Incapacity Benefit, Severe Disablement Allowance, Disability Living Allowance (DLA), Personal Independence Payment (PIP), Armed Forces Independence Payment, Attendance Allowance, Constant Attendance Allowance or a similar benefit; or if they are not receiving any disability benefits but their degree of incapacity is equivalent to that required to qualify for such a benefit.


Example

Mr and Mrs Davies are married and own the home they live in. Mr Davies is assessed as needing residential care and the local council carry out a financial assessment on him. As his partner (Mrs Davies) will be occupying the property as her main or only home (and has been since before Mr Davies had to go into residential care), the value of their home is disregarded in the financial assessment.


A discretionary disregards may apply in other circumstances, one such example being where the property is the main or only home of someone who has given up their own home in order to care for the person who is now in residential care or is an elderly companion of the person who is now in residential care.

If the person you are looking after owns another property which they don’t live in, then this would count as capital.

If the value of a property is taken into account, then the actual amount taken into account is generally the current market or surrender value of the property, minus 10% if there will be expenses involved in selling the property and minus any outstanding mortgage.

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Q: If the person I am looking after owns their own home, but wants to transfer the home into mine (or someone else’s) name, is this allowed?

A: If the person you are looking after is able to make their own decisions, and wants to transfer their home into someone else’s name, then in theory they are allowed to do this. However, it may have implications if they are having a financial assessment from the local council (or for other means-tested situations).

This is because when the local council are looking at how much capital someone has, they can sometimes decide that the person has ‘deprived themselves of assets’.

‘Deprivation of assets’ is where a person has intentionally deprived or decreased their overall assets in order to reduce the amount they have to pay towards their care and support. This means that it should be considered whether, at the point the person deprived or decreased their overall assets, they could have had a reasonable expectation of their need for care and support.

Examples of situations which could count as ‘deprivation of assets’ include: where a person makes a lump-sum payment to someone else; where a property has been transferred into someone else’s name; and where assets have been reduced by living extravagantly.

It would ultimately be the local council who would decide whether a person has ‘deprived themselves of assets’ however the following are some examples of when this may and may not happen.


Example where ‘deprivation of assets’ has happened

Mr Singh owns his own home. Mr Singh transfers the home into his daughter’s name, as he wants her to have the home when he goes into residential care, which he knows will have to happen soon. The local council assess Mr Singh as needing residential care and carry out a financial assessment on him. They decide Mr Singh has deprived himself of assets.


Example where ‘deprivation of assets’ has not happened

Mr Baker owns his own home. Mr Baker transfers the home into his daughters name at a point when he has no health conditions and has no knowledge that he will need care and support in the future. Years later Mr Baker develops a health condition and the local council assess him as needing residential care. The local council carry out a financial assessment on Mr Baker and decide that he has not deprived himself of assets by transferring his home into his daughters name at a time in the past when his circumstances were very different.


If deprivation of assets has occurred, then normally the person would be treated as if they still had that asset for the purposes of the financial assessment (called ‘notional capital’). However, if the asset has been transferred to a third party, the third party can be liable to pay the difference between what the person would have paid towards their care and support had they not deprived themselves of assets, and what they actually have to pay now they have deprived themselves of assets.

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Q: I have heard that there will be changes to the capital limit for the financial assessment, and that there will be changes to how property is treated, is this true?

A: During the June 2017 election, there were some proposals to change the capital limit for the financial assessment and to change to way property is treated in the financial assessment. These proposals attracted a lot of publicity and caused a lot of anxiety.

However, these proposals have now been dropped, and instead it has been said that there will be a consultation which will set out options to improve social care.

The proposals would have had two significant changes:

  • The upper capital limit would have increased from the current £23,250 to £100,000. The proposals didn’t mention what the lower capital limit would have been, or whether tariff income would still have applied to capital between the lower and upper capital limits.
  • The way property is treated would have changed, for the first time the value of the property a person lives in would have been counted as capital for home based care (which is not the case now) as well as residential care (which is often the case now).

However, as mentioned above, these proposals have been dropped and it’s highly unlikely they will ever be put forward again.

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