WHO PAYS FOR SOCIAL CARE?
Your local authority is responsible for social care and will work out if you qualify for financial support. They will provide a means test to calculate whether you have to pay some or all of the cost of a care home or in-home care yourself. If you have assets of £23,250 or more in England or Northern Ireland(1) (or £28,750 in Scotland(2) and £50,000 in Wales(3), it’s likely you’ll have to pay the full cost of care yourself. If you have a ‘primary’ medical need, there’s a chance that the NHS will pay for continuing healthcare or nursing care.
“The vast majority of us are going to have to take some responsibility for our care needs,” says Tony Müdd, a Divisional Director at St. James's Place Wealth Management. “However, the public are either under the misapprehension that long-term care is provided free at the point of need by the state and funded from taxes already paid during their lifetime, or that if this is not the case, they believe that it should be.”
This point of view is backed up by research carried out by the Local Government Association. In a 2018 poll, 44% of adults thought – incorrectly – that social care was funded by the NHS, while 50% said they had never thought about how they would pay for their care when they get older(4).
The responsibility for arranging social care in the UK falls to local authorities, and it is also down to them to work out who qualifies for financial support and who needs to pay their own in-home or care home fees. But how much a local authority will pay for care, and the way in which eligibility and payments are calculated, can be complex and varies according to which of the UK nations you live in.
“Most people won't have an understanding of the system until they reach either a point of need themselves or their family member has a personal point of need,” says Tony Clark, Senior Propositions Manager at St. James's Place. “Added to the fact that most people will end up having to pay for some or all of their care, it can be quite a daunting prospect.”
So, to help bring some clarity to the situation, here’s a general outline of how it all works:
Taking a means test
If your local authority has agreed that you are eligible for care, you can undergo a means test to find out if they will pay for some or all of the fees.
The first thing the council will do is work out a reasonable cost for your care. Depending on whether you need care in a care home or are able to stay in your own home and have regular visits from carers, the cost will vary. The council will, however, only calculate the amount needed to cover your basic requirements – you’ll have to pay top-up fees if you want any extras, such as a larger room in a care home.
They’ll then look at your ability to pay for the basic level of care, firstly through your regular income (such as from the State Pension and any private pensions you might have). If you receive enough income to cover the costs of your care, you’ll have to pay for it all yourself.
If your income isn’t sufficient for this, they will look at any financial assets that you have, such as savings and investments. If your assets are held jointly with your spouse or partner, they will usually be divided equally and only your share will be taken into consideration. It will also include the value of your home if you’re moving to residential care (but not if you will be receiving care in your own home or if your spouse or partner plans to carry on living in your home).
If the total value of your assets is above the following thresholds, you’re unlikely to receive any funding from your local authority:
- £23,250 in England and Northern Ireland(1)
- £28,750 in Scotland(2)
- See below for Wales
There is also a lower threshold, which is as follows:
- £14,250 in England and Northern Ireland(1)
- £17,000 in Scotland(2)
- See below for Wales
If the value of your assets falls below this figure, the local authority will probably fund all of your care. If it falls somewhere between the two, they will partially fund your care: you’ll have to contribute £1 for each £250 of assets you own above the lower level.
In Wales, there is a single threshold of £50,000 for those in residential care. That means if the value of your assets is above this level, you will receive no funding; while if it is below, you will receive full funding. For those requiring in-home care, the single threshold is £24,0003.
If, once you’ve started paying for care, the value of your assets falls below these thresholds, you can apply for a reassessment from your local authority.
With many of us facing the prospect of needing some form of Social Care during our lifetime, particularly in older age, finding what you need for yourself or loved one can be a daunting task.
This is why St. James's Place is working with Care Sourcer, to provide you and your loved ones with a care concierge service that delivers a broad range of support on all of the planning and information involved in your care needs. Please get in contact if you’d like more information about this service.
Care funded by the NHS
There is also a possibility that you can receive healthcare or nursing care funded by the NHS (although this is not available in Scotland).
This applies if you’re severely ill or will need medical care over an extended period. There’s no means test required for this – if you qualify, the NHS will cover all the costs in the normal way, regardless of your financial situation.
However, you will need to undergo a continuing healthcare assessment, which will be carried out by a minimum of two health or social care professionals. These can be very strict, and also the list of health problems or illnesses that will qualify you for funding can be vague. However, as a general rule, you must have a ‘primary’ healthcare need that has arisen because of disability, an accident or illness.
If you’re frail, or simply suffering from ‘old age’ and don’t have any specific medical problems that are causing you to need care, you’re not likely to qualify – even if you have long-term care needs.
As with other care, the healthcare could be provided in your own home, but also in a residential nursing home or a hospice, according to your particular circumstances.
If you are assessed as needing nursing care, but do not qualify for NHS continuing healthcare, you may be eligible for NHS-funded nursing care. This is a contribution provided by the NHS to help pay for care you receive from a registered nurse. To receive this benefit, care must be provided in a nursing home.
We can help
In all cases, if you or a loved-one needs long-term care, the situation can be complicated and highly daunting at what is, for many, a very emotional time. It’s therefore a good idea to seek professional advice and support – and St. James's Place can help, thanks to our financial expertise and our partnership with Care Sourcer, who have an extensive knowledge of the UK’s care systems.
Together, we will be able to guide you calmly and expertly through the whole process, from working out the type of care that suits you best and how much financial support you are eligible for, right through to finding a provider and funding the cost.
The services provided by Care Sourcer are separate and distinct to those offered by St. James's Place.
1 Department of Health & Social Care, 2021
2 Care Information Scotland, Paying care home fees, April 2021
3 Welsh Government, Charging for social care, 2021
4 Local Government Association poll, “Majority of people unprepared for adult social care costs”, October 2018, 1,741 people surveyed