Deciding how to meet the cost of long-term care has become an increasingly daunting process for elderly people and their families. In particular, people are frequently left confused regarding what funding is available from the state.
Our team of professionals is well aware of this and is here to help you understand and consider all of the options available to you, both through our in-house knowledge and through relationships we have with specialists in financing long-term care for the elderly. It is vital that you are able to achieve the most suitable arrangement for you and your family.
Families typically have four main care funding options available to them…
1. Benefits entitlements
To help pay for your care it’s important to ensure that you’re claiming all of the benefits you’re entitled to. These benefits are usually easy to apply for and they often aren’t means-tested, so don’t take into account your income and savings.
Carer’s Allowance is the main welfare benefit to help carers. You may still be able to claim it, even if you don’t think of yourself as a carer. You could be eligible if you:
- spend at least 35 hours a week caring for a disabled person (you don’t have to live with them or be related to them)
- care for someone who receives the higher-rate or middle-rate care component of Disability Living Allowance, either rate of Personal Independence Payment daily living component, or any rate of Attendance Allowance
- do not earn more than £128 a week (after deductions)
- are not in full-time education
You don’t have to be related to or live with the person you care for to claim Carer’s Allowance. It’s extra money each week for you to use as you want or need to. Any savings or your National Insurance record also won’t make a difference to your claim.
Carer’s Allowance is worth £67.25 per week (for April 2020-21) and is usually paid every four weeks. You’ll also get National Insurance credits each week towards your pension if you’re under pension age.
To claim Carer’s Allowance you should call the Carer’s Allowance Unit on 0800 731 0297 (textphone: 0800 731 0317) or visit www.gov.uk/carers-allowance to download a claim form or claim online. After you submit your claim, you’ll receive a decision in writing that will tell you if you have been awarded Carer’s Allowance and from what date.
Pension Credit is a benefit for people over State Pension age. It tops up your income if you’re struggling to make ends meet.
There are two different types of Pension Credit available, depending on your income and circumstances:
Guarantee Credit tops up your weekly income to a guaranteed minimum level of £173.75 if you’re single or £265.20 if you’re a couple.
To be eligible for Guarantee Credit you’ll need to have reached State Pension age. This is now the same for men and women and is gradually increasing to reach 66 by October 2020. Working out your State Pension age can be tricky, but you can check your qualifying age easily using the State Pension calculator at www.gov.uk/state-pension-age.
If you’re an eligible age, you can claim Guarantee Credit if your weekly income is less than £173.75 if you’re single, or £265.20 if you’re a couple.
If you’re an eligible age, but your weekly income is higher than these thresholds, you may still claim Guarantee Credit if you meet one of the following criteria:
- you have a severe disability
- you are a carer
- you have to pay housing costs like a mortgage
Savings Credit is extra money if you’ve got some savings or your income is higher than the basic State Pension. It’s only available to people who reached State Pension age before 6 April 2016. You could get up to £13.97 extra per week if you’re single or £15.62 if you’re a couple.
Only people who’ve reached State Pension age before 6 April 2016 may be eligible to claim the Savings Credit part of Pension Credit. If you’re a couple and one of you reached State Pension age before 6 April 2016, you may be able to claim. There isn’t a savings limit for Pension Credit, but if you have over £10,000 this will affect how much you receive.
To claim Pension Credit:
- Make sure you’ve reached the qualifying age by checking the dates above or the gov.uk calculator www.gov.uk/state-pension-age
- Call the Pension Credit claim line on 0800 99 1234 (textphone: 0800 169 0133). They will fill in the application for you over the phone. You can also claim online at www.gov.uk/pension-credit/how-to-claim if there are no children or young people included in your claim and you already claim your State Pension
Council Tax Reduction (also known as Council Tax Support) is a benefit to help people who are on a low income or claiming certain benefits to pay their Council Tax bill.
If you’re on a low income or receiving certain benefits, you may be able to claim Council Tax Reduction. Each local council has different rules so check with your local council about what you may be entitled to. You can claim Council Tax Reduction regardless of whether you own your own home or rent, or whether you’re working or unemployed.
The amounts of support given will depend on the rules at your local council. The amount of Council Tax Reduction you will get depends on many factors, including:
- which benefits you receive
- your age
- your income
- your savings
- who you live with
- how much Council Tax you pay
You may get more Council Tax Reduction if you receive a disability or carers benefit. If you receive the Guarantee Credit Part of Pension Credit you may even get your Council Tax paid in full. If you don’t get Guarantee Credit but you have a low income and less than £16,000 in savings, you may still get some help. Pensioners still need to pay Council Tax, but may get a discount if they live alone, or depending on their situation be entitled to Council Tax Reduction.
Local authorities run their own Council Tax Reduction schemes so these differ from area to area. Contact your local council to find out about their Council Tax Reduction scheme and whether you can qualify. You can find contact details for your local council Council Tax Reduction team here www.gov.uk/apply-council-tax-reduction.
2. NHS Continuing Healthcare funding
Some people with ongoing significant health needs can get their care paid for through NHS Continuing Healthcare. Your eligibility is determined by an assessment, which looks closely at your needs before recommending the level of care you should receive. NHS Continuing Health Care is non means-tested but the qualification criteria are strict. If you are eligible, you may be given the option of a Personal Health Budget to enable you to choose where and by whom you wish to be cared for.
NHS Continuing Healthcare is a free package of care for people who have significant ongoing healthcare needs. It is arranged and funded by the NHS. You can receive NHS Continuing Healthcare in any setting outside hospital, including in your own home or in a care home. If you receive care in your own home, the NHS will cover the cost of the support you need from health professionals and the cost of personal care which can include help with washing and getting dressed.
Eligibility for NHS Continuing Healthcare isn’t based on whether you have a specific health condition.
To get NHS Continuing Healthcare you must:
- have ongoing significant physical and / or mental health needs,
- and having taken account of all your needs, it can be said that the main aspects or majority part of the care you need is focused on addressing and / or preventing health needs
If you have ongoing health needs, there are particular times when NHS staff or a member of the social work team should consider whether you may be eligible for NHS Continuing Healthcare:
- when you are ready to be discharged from hospital and your long-term needs are clear
- once a period of intermediate care or rehabilitation following a hospital stay have finished and it’s agreed your condition is unlikely to improve
- whenever your health or social care needs are being reviewed as part of a community care assessment
- if your physical or mental health deteriorates significantly and your current level of care seems inadequate
- when your nursing needs are being reviewed. This should happen annually if you live in a nursing home
- if you have a rapidly deteriorating condition and may be approaching the end of your life
In these circumstances, your discharge staff, staff co-ordinating your intermediate care, GP or a member of the social work team should raise the issue of NHS Continuing Healthcare and assess your eligibility. If they don’t, make sure you ask for an assessment.
Speak to your doctor or social worker if you think you might be eligible for NHS continuing healthcare. They can make a referral to the relevant CCG. You can also approach your CCG and explain why you believe you should be considered for NHS continuing healthcare. Your CCG is the one your GP practice is aligned to.
The assessment process usually starts with the completion of the Checklist tool by a nurse or a social worker trained to complete it. This identifies whether you need to have a full NHS Continuing Healthcare assessment.
In some situations, it will be clear to health and social care staff that your needs do not indicate NHS Continuing Healthcare at this time. If health and care staff agree, they should record this in your notes, with their reasons. If there is any doubt between staff, they should complete the Checklist.
If your condition is deteriorating rapidly and you may be approaching the end of life, staff may decide to submit a proposal for you to be Fast Tracked for NHS Continuing Healthcare, which follows a quicker process.
If you’re referred for a full assessment, evidence will be collected from all relevant health and social care professionals about your physical, mental health and social care needs.
A team of health and social care professionals will meet to look at this evidence, complete a Decision Support Tool, and make their recommendation as to whether or not you’re eligible. You and / or your representative can attend and participate at this meeting.
Their recommendation is given to the Clinical Commissioning Group (CCG) responsible for agreeing and funding your care package. Except in exceptional circumstances, the CCG confirms their recommendation.
The CCG should write to you with their decision and explain the reasons for it.
If you’re found to be eligible for NHS Continuing Healthcare the CCG will discuss with you what care and support you need and you have the right to ask for a Personal Health Budget. This can give you more choice over the services and care you receive and the provider you wish to use.
3. Local Authority funding
If you require hourly care or live-in care, local authority funding could help pay for the associated costs. However, unlike healthcare funding, local authority funding will be means tested and how much you pay towards your home care depends on a number of factors, including your income and savings. Everybody is entitled to a care needs assessment and a financial assessment from their local authority to determine what kind of care and support would help them and how much they are responsible for paying towards their care.
As it stands today, your local authority will only help pay for your care needs if you are deemed to have insufficient assets to meet these care costs yourself. A ‘financial assessment’ is used to gauge this which looks at both your capital (property, savings, investments) as well as your income (usually pensions and benefits). Here’s how the financial assessment will look at your income and savings, and how this will affect what you pay for care:
- If your capital is less than £14,250: you will be eligible for maximum support from your local authority. You won’t have to contribute from your capital, but you may be expected to contribute from your income
- If your capital is between £14,250 and £23,250: you will be eligible for some support, but you will have to contribute towards the cost of your care at a rate of £1 for every £250 of savings you have between £14,250 and £23,250. This is known as ‘tariff income’
- If your capital is above £23,250: you will be deemed a self-funder and have to pay the full cost of your care. If you have less than £23,250 in capital, but a weekly income that is considered high enough to cover the cost of your care, you will also have to pay all of your fees
Any income contributions you are asked to make towards the cost of your care shouldn’t take your income below a set level, known as the Personal Expenses Allowance (PEA). In 2020-21 this is a minimum weekly allowance of £24.90. This money is for you to spend on personal items, such as toiletries, stationery and haircuts. Local authorities have discretionary powers to increase the PEA in special circumstances, such as if a person has property-related expenses or is still supporting a spouse. It’s worth checking this with your local authority when you’re assessed.
If you’re cared for at home, your house is not included in the financial assessment. In other words, the financial assessment officer must effectively pretend that your house doesn’t exist. However, if you’d like to move to a care home, provided that no one else lives in it, your house will be included in the financial assessment. In this instance, the likelihood of the local authority paying for your care is low.
If you’re eligible for help, your local authority will provide you with a personal budget to pay for this support. It’s up to you how you want to use your personal budget to meet your eligible needs. It can be used in one of three ways:
- your local council can manage an account
- a third party can manage an account
- you can manage a Direct Payment
With a Direct Payment cash payments are paid directly into a bank account specifically set up to receive the personal budget (not your usual savings account). You can choose how to spend this money to meet the needs set down in your agreed care plan, which maximises your choice and independence and enables you to use a care provider of your choice. If necessary, you can also top up the payments yourself to cover any shortfall.
If you think you, or someone you know, needs help to cope day-to-day, the first step is to get a care needs assessment from your local council. The care needs assessment is free and anyone can ask for one.
To get a care needs assessment contact social services at your local council and ask for a needs assessment. You can call them or do it online using this tool www.gov.uk/apply-needs-assessment-social-services.
4. Privately funding care
There are now various options available to you in seeking to finance your care in a simple, sustainable way. Most families are keen to ensure that they don’t have to worry about what might happen in the future whilst also protecting as much of their existing capital as possible. Some of the financial policies available include Immediate Care Plans (also known as ICPs, Immediate Annuities or Care Fees Payment Plans) and Equity Release (whereby you can raise capital, income or a combination of the two from your home whilst continuing to live in it).
Immediate Care Plans (also known as ICPs, Immediate Annuities or Care Fees Payment Plans) are tax efficient financial policies which are specially designed to cover all or part of a person’s care fees. Once put in place, a plan pays an agreed tax-free amount at regular intervals, directly to the care provider, for the remainder of the person’s life. An upfront lump sum is required to purchase such a plan which is calculated depending on age and health. The benefits of an Immediate Care Plan are that they provide peace of mind that care fees will be covered in the future and they enable a person to have financial independence, dignity and choice of where they receive care.
Equity release is a method through which elderly people can financially benefit from the value of their home whilst they continuing to live at the property. Equity release is becoming a popular and realistic way of enabling people to receive formal care in their own homes, delaying or preventing altogether the move into alternative accommodation.
We have provided here a brief overview of some considerations with regards to financing elderly care. However, this process is not straight-forward and it is important that you are able to make good, long-term decisions based on your individual situation.
We have therefore teamed up with a professional body called Symponia which is able to not only provide more detailed information regarding care planning, but is also able to introduce you to an appropriately trained, qualified, local professional who can offer you advice on the options available. To contact Symponia visit www.symponia.co.uk.