Local authority funding
Every local authority social services department must follow Government rules from the 'Charging for Residential Accommodation Guide' when they work out how much you will need to pay towards your care home fees.
The local authority will need to find out how much you can afford to pay towards your care home fees, so they will ask you to complete and sign a financial assessment form. If you refuse to complete the form, the authority may charge you the full cost of the care home fees, but they cannot refuse to provide the care if it is assessed that you need this care.
The authority will need to know the level of your capital, savings and weekly income (including your beneficial interest in property). If you have savings and capital of less than £13,500 (known as the 'lower amount') you will not be expected to use any of this money to pay the care home fees. However, you will have to contribute all of your weekly income - including your pension, benefits and so on - towards the fees (with a few exceptions), except for £21.15 a week (£20.00 in Wales) which you can keep to spend on personal items; this amount is called your Personal Expenses Allowance.
The authority will contribute toward the fees of the care home, but you will have to pay a charge known as 'tariff income' from your savings and capital. 'Tariff income' means for every £250 you have over the lower amount, they will subtract £1 per week from the money they contribute.
If you have savings and capital worth over £22,250 (known as the 'upper amount') you will have to pay all of the fees of the care home until your money reduces to this limit. If your savings and capital are less than the upper amount but your weekly income is more than your care home fees plus the Personal Expenses Allowance added together, you will have to pay all of the fees.
If your savings and capital falls below the upper amount while you are in a care home, you will become eligible for help from the local authority.
If you want a more expensive home than the authority is willing to pay for, you are allowed to arrange a 'third party contribution' from another source.
Your home would be included in your assets only if you live alone, or if as a couple you are both moving into a care home. In addition, the local authority will disregard the value of your home for 12 weeks after your admission to permanent nursing or residential care.
In order to understand what investments are taken into account we would suggest that you talk to our adviser specialising in this area.