Checking your Local Authority funding entitlements
If you want to receive Local Authority help towards the cost of your care, you’ll need to have a financial assessment, also known as a ‘means test’, carried out by your Local Authority.
If you are considering care in your own home, the property will not be taken into account in the means test. However, if you are going into residential care the value of your property (less any outstanding mortgage) will normally be included in the means test. Owning your home is one of the major reasons you may fail to qualify for support towards the cost of care but there are circumstances when the value of your home is excluded from the means test.
How does my Local Authority assess my care funding entitlements?
The same process is used to determine how much you’ll need to pay whether your care is received at home or in a residential setting such as sheltered accommodation or a care home. Your Local Authority will first want to know how much money you have access to, as this helps determine if you are in need of financial assistance.
Savings and assets held in your name
- Bank and building society accounts
- National savings and premium bonds
- Stocks, shares and investment products
- Income from state, personal and occupational pensions
- Property and land (less any mortgage)
If you have jointly held savings and assets, say with your spouse, their value will usually be divided by two to calculate your share.
Assets that are not included in the means test
Some of your assets will not be included in the means test, such as:
- Surrender value of existing life policies/ annuities
- Some compensation payments held in trust or by the courts
- Some investment bonds with a life assurance element (you should check with the provider)
- Property that continues to be inhabited by a partner, dependant or certain other parties
Income that is disregarded from the means test
Some forms of income will also be disregarded from the means test, including:
- War Widows special payments
- The mobility component of the Disability Living Allowance
- Spouse/partner payments from a private or occupational pension (within certain limits)
Means test thresholds
If your assets are more than the threshold of £23,250 (excluding the value of your home) the Local Authority will charge you for the full cost of your care. Later on, if your assets fall below the threshold in the future, your situation can be reassessed but you will need to request this.
If your assets are below the upper threshold of £23,250 but are over the lower limit of £14,250, you will need to contribute £1 for each £250 of assets above the lower level.
When the value of your assets fall below £14,250, the Local Authority will pay the cost of care.
Extra considerations for funding care at home (domiciliary care)
In England your Local Authority will not pay for care at home if the cost is more than it would be to receive in a care home.
In Scotland, there is no assessment for people over 65, as personal care is then free; however, you will still be charged for additional services such as day care, ‘meals on wheels’ and community alarms.
In Wales, councils should cap charges for non-residential social costs care at £60 a week. This cap on charges does not include services that have a flat rate charge, such as 'meals on wheels' - these services will be charged separately to any capped charge for domiciliary care.
When is my home excluded from the means test?
You can keep your property and not include it in a means test of assets if it continues to be the home of someone else such as:
- A spouse or partner
- A relative who is over 60 or incapacitated
- A minor under 18 who is dependent on you
- A separated and single partner with responsibility for a minor
- In some circumstances, someone who gave up their own home to look after the person now going into care
Selling a much-loved home can be a highly emotional and difficult decision, one which many thousands of people a year go through with in order to pay for their long term care fees.
Below are some factors to consider before making a decision to sell your home:
Can I delay selling my home?
If there is nobody else living in the property, you may be able to get a deferred payment agreement from the Local Authority. Under this scheme, the Local Authority agrees to help you with the cost of care and will get these costs back when the property is eventually sold.
Can I take half the property value out of the means test?
If you and your spouse own your property as tenants-in-common rather than as joint tenants, each half can be passed on to someone else (such as children) rather than each other. This may enable half the property value to be taken out of the means test after the first death. You will need to seek legal advice to confirm this.
Can I have time to sell my property?
Even if you have to sell your property to help with the cost of care, you may be given a little breathing space. Provided that the value of your other assets fall below the upper assets limit for state care funding (currently £23,250 in England and Northern Ireland, £25,250 in Scotland and £23,750 in Wales), the Local Authority will pay your care home fees
for up to 12 weeks to allow you time to sell your property. If your property still has not sold after 12 weeks, the Local Authority may move to a deferred payment agreement. This is a scheme to allow care fees to be paid by your Local Authority until the property is sold. For further information about this scheme, please click here
What if I have already sold my property?
You may be asked detailed questions about your current and past property ownership. Local Authorities are aware of people attempting to get rid of property to reduce the value of their assets. Strategies such as bequeathing a property to descendants or putting it in trust may be viewed as a deliberate attempt to deprive yourself of capital. This is known as deprivation of assets
. In this case, the property may still be included in the means test at the Local Authority’s discretion.
Can I use my property to fund my care without selling it?
You can rent out your house to generate extra income. Also, you can use the equity within your property to pay fees directly or purchase a financial product to pay for your care fees, to avoid you having to sell your home. Find out more
Get help with financial planning
If you find yourself having to pay for your care, it is worth getting advice from an experienced and qualified specialist. They will be able to help you look at your finances and plan for the costs of care both now and in the future. They’ll have an understanding of how the care system works and how to ultilise any other sources of funding that may be available to you. Use our directory to find a care fee specialist adviser
who’s close to you.