First Things First
If you need care, the first step is work out what type / level of care you need and if you can afford it. There’s a process you need to go through and I’ll try to set it out as clearly as I can.
Sort Out Your Finances First
Sorting out your finances early helps you and your loved ones make quick decisions about your care. You can:
Talk to them about how you want your money managed, so they can step in if needed.
Consider making and registering a power of attorney for legal control over your finances.
Write / update your will setting out your wishes. It will make things easier after you’ve said goodbye.
This guide will help you find out what you could be entitled to. You might qualify for extra payments that could boost your income, such as:
Attendance Allowance: if you’re state pension age or over and need help with personal care because of an illness or disability.
Personal Independence Payment or Adult Disability Payment: If you’re over 16 and under state pension age.
Disability Living Allowance: If you’re under 16.
Consider If Family Could Care For You Instead
This could be a big ask but moving in with family might work well. That said, obviously it can have a significant impact on everyone’s lifestyle. It’s important to be realistic and make sure you all have the same expectations.
Here are things to consider:
Who would provide the care you need?
How much rent and bills would you pay (if any)?
Who would pay for any adaptions to the home?
What happens if you fall out or living together doesn’t work?
Moving in with someone might also impact your (and their) finances, such as:
Changing entitlements to benefits or council tax discounts
Not being eligible for support if you sell your house.
It’s, therefore, important to protect yourself by getting legal advice, which might include a formal agreement. It might seem awkward to discuss these things, but it should help make sure it’s the best option for everyone.
If you’re trying to help an older person, you might want to have a look at this website which covers how to talk about the subject in a sensitive way.
Check If You Qualify For Funding
You might get some or all your care paid for, depending on your needs and finances. Here’s how you might go about it:
1. NHS Funding
The NHS might pay if you have a disability or medical problem. Sometimes, the NHS pays for care home costs for people with serious health needs. There are 2 ways they do this:
1. NHS continuing healthcare covers ongoing medical care for those with complex health needs due to a disability, accident or major illness.
2. NHS-funded nursing care can help cover care home fees if the NHS decides you need nursing care. If your regular expenses have crept up during your working life, or indeed in the early years of retirement your pensions and other money might need to give you a bigger income than you’ve previously calculated.
These don't depend on your money situation but there are strict rules for who qualifies.
2. Ask For A Care Needs Assessment
A care needs assessment decides what level of care and support you need, based on how well you can manage everyday tasks. You can ask your local council or health and social trust for one, depending where you live.
Here’s a link to help you find out which organisation you should be approaching based on your postcode.
3. Prepare For A Financial Assessment
If your care needs assessment shows you need paid care, like a place in a care home or for someone to visit your home, a financial assessment will be arranged. This ‘means test’ is to decide if you can afford to pay for it all yourself, or if you qualify for any funding.
You’ll usually be asked about your regular income (like earnings, benefits and pensions) and capital (savings, investments, land, property and business assets).
To help prepare, gather information for any accounts you have or income you receive. For example:
Savings accounts, including ISAs and premium bonds.
Investments, including stocks and shares and investment bonds you own.
Property or land in your name.
Disability-related expenses you have.
If you have joint finances, like a savings account with your partner, or own a home together, it’s assumed you have an equal share unless you can prove otherwise.
Funding Depends On How Much Money You Have
You’ll usually be expected to use part of your income to help pay for care. But some usually doesn’t count, such as income from paid work.
If your capital is worth more than £23,250 (in England & Wales), you’ll usually need to pay the full costs of your care yourself.
If it’s less, it’s typically assumed you receive an income from some of it. This is calculated at a set rate, known as the tariff income.
The Value Of Your Home Might Not Be Counted
If you’re a homeowner, the value of your home isn’t usually counted if:
You’d still live there, to receive care at home.
You move to a care home, but certain people still live there such as your spouse / civil partner.
There might be other circumstances too, such as if your previous carer gave up their home to live with you. it’s far from cut and dry.
How Your Pension Is Assessed
If you don’t yet receive a pension income, your pension isn’t usually considered until you reach state pension age (currently age 66 for most).
They will typically check how much you’d get if you bought a guaranteed income for life, known as an annuity. This figure might also be used if you decide to take a lump sum and keep the rest invested (known as flexible income).
If you take lump sums or your whole pot in one go and save or invest it, this is then usually treated as capital or income, depending on the value.
This is a bit of a tricky area. Here’s a link where you can get more help / clarity.
Your Assets Could Be Counted Even If You Give Them Away
Some people might consider giving their house or assets to a family member to avoid them being counted in a financial assessment.
4. You’ll Be Told If You Qualify For Funding
You’ll be sent a letter explaining the cost of your care and how much you need to pay. There are usually 3 outcomes which are you get all costs paid, need to pay a portion or need to fund it all yourself.
If you have any questions about how your financial assessment was calculated, you can ask the council to explain it to you.
If You’re Eligible For Funding
If you qualify for help, you’ll usually receive a personal budget in one of two ways:
A direct payment to your bank account each month.
Your local council manages your care and sends you a regular bill if you have anything to pay.
If you need a care home, you should be offered a choice to suit your needs. But you might be able to choose a more expensive care home if someone else pays the extra, known as a top-up fee.
If you need to sell your home to pay for your care, you’ll be told if you’re eligible for a 12-week property disregard where the value of your home isn’t included in your financial assessment for 12 weeks, giving you time to sell it or consider other options. During this time, the local council will contribute to your care home fees.
If you don’t want to sell your home (or it’s hard to sell), you can ask for a deferred payment agreement. This means your local council effectively lends you the money to pay for your care costs. The debt is then repaid when your home is sold.
If You Have To Fund Your Own Care Costs
If you don't qualify for funding, you'll be responsible for paying the full cost of your care. However, your council must review your finances annually.
5. You’ll Need To Request A New Financial Assessment If Things Change
If your financial situation changes, such as starting to receive a state pension or inheriting money, you'll need to request a new financial assessment.
This could mean you become eligible for more or less financial support. Either way, it's important to tell your local council about any changes to ensure you receive the appropriate help.
Check For Insurance Policies
Before paying for care, check if you can claim on an existing insurance policy. If you have health insurance, it might help cover costs. Look for policies such as:
Life insurance with cash-in value or payout for terminal illness, as long as it's not needed by dependents.
Life insurance with critical illness cover.
Long-term care insurance, which might be included in older policies.
Employer benefits, like early pensions or lump sums for terminal illness.
Personal income protection policies that provide income if you can't work due to ill health.
To claim, gather all original paperwork and contact your broker if the policy was bought through one.
Hope It Was Useful
This can be (like so many things) a complicated area but I hope I’ve explained things in a relatively clear way for you.
Until next time!...