Understanding the Care Home Funding Model in Scotland
In Scotland, the funding for care homes involves contributions from the individual, local council, and the NHS. Free personal care and nursing care are available to all eligible adults, regardless of income or assets. However, accommodation costs are not free and are subject to a financial assessment.
The role of the care needs and financial assessment
Two assessments are carried out by the local council's social work department:
- Care Needs Assessment: Determines the type of care required and if a care home is suitable. This is free and necessary for funding consideration.
- Financial Assessment (Means Test): Examines income and capital to determine the individual's contribution to accommodation fees. Scotland has different capital thresholds than other parts of the UK.
Free Personal and Nursing Care payments
After a successful care needs assessment, the local authority pays a weekly amount to the care home for personal and nursing care. These rates are reviewed annually and are not means-tested.
Free personal care covers help with daily tasks. Free nursing care is for services requiring a registered nurse.
How your finances affect your contribution
The financial assessment uses capital thresholds:
- Below £22,000 (2025/26): Capital is not counted. Contribution is primarily from income.
- Between £22,000 and £35,500 (2025/26): A 'tariff income' is added for capital over £22,000.
- Above £35,500 (2025/26): Classified as a 'self-funder,' responsible for full care home fees, but still receiving Free Personal and Nursing Care payments.
Comparison of funding scenarios
| Feature | Council-Funded Resident | Self-Funder |
|---|---|---|
| Free Personal/Nursing Care | Yes, paid by the council | Yes, paid by the council |
| Accommodation Costs | Covered by means-tested council contribution and personal income | Paid entirely by the individual, except for personal/nursing care payments |
| Capital Threshold | Below £35,500 | Above £35,500 |
| Care Home Choice | Access to homes that accept the local council's standard rate; third-party top-ups may be required for more expensive homes | Greater choice of care homes, but responsible for higher fees |
| Benefit Entitlement | Some benefits (e.g., Attendance Allowance) may stop after 28 days of receiving means-tested funding | Can continue to receive benefits like Attendance Allowance |
The issue of 'top-up' fees and self-funder rates
A 'top-up' fee, paid by a third party, is required if a council-funded resident chooses a care home more expensive than the council's rate. Some evidence suggests self-funders may be charged more than council-funded residents.
What happens to your home?
The value of a property is usually included in the financial assessment if the individual is the sole resident. However, selling the home is not mandatory. Options like a Deferred Payment Agreement may be available. Property may be disregarded in certain circumstances, such as a spouse still living there. Discussion with the council is recommended.
Seeking expert financial advice
Seeking independent financial advice is recommended due to the complexity of care home funding. Organisations like Citizens Advice Scotland offer free, impartial advice. Your local council also provides guidance.
Conclusion
While eligible individuals in Scotland receive free personal and nursing care, care homes are not entirely free. Residents must contribute to accommodation costs based on a financial assessment of their income and capital. Understanding this distinction is vital for future care planning.
For more information on social care support in Scotland, visit the official Scottish Government website.
