The financial assessment process
When an individual's care and support needs have been assessed by their local authority in Wales, a separate financial assessment is carried out. This process looks at your income and capital (savings, investments, and potentially your property) to determine if you must contribute towards your care costs. It's a legal requirement that the person with care needs is financially assessed, and refusing to participate can lead to the full cost being charged.
Factors considered in the assessment
During the financial assessment, the local authority considers:
- Capital: This includes savings, investments, and in certain circumstances, the value of your property.
- Income: Your regular income from sources like the State pension, occupational pensions, and most benefits is taken into account.
- Disregarded Income: Certain benefits, such as the mobility component of Personal Independence Payment (PIP) and Disability Living Allowance (DLA), are disregarded.
Funding rules for residential care
For individuals needing long-term residential dementia care in a care home, specific rules apply, and the financial thresholds can determine whether you are a self-funder or receive local authority support.
Capital limits for residential care
In Wales, the capital limit for permanent residential care is a single threshold.
- Above the Limit: If your available capital is more than £50,000 (2024 rate), you are generally required to pay the full cost of your care home fees as a 'self-funder'.
- Below the Limit: If your capital is £50,000 or less, your capital will not be used to pay for your care. However, you will still be assessed on your income to determine your contribution.
Minimum income amount (MIA)
If you are contributing to your care home fees, you must be left with a minimum amount of money for personal use each week. This is known as the Minimum Income Amount (MIA). For the 2025/26 rate, the MIA for residential care in Wales is £44.65 per week. This amount is for personal spending, and the local authority must ensure you are left with at least this amount.
The role of property
If you own your home, its value may be included in the financial assessment for permanent residential care after the first 12 weeks. This can push you over the capital limit, meaning you would need to sell your home to pay for your care. However, the value of your property is disregarded if:
- Your partner or a close relative who is over 60 or incapacitated continues to live there.
- It is the home of a child under 18 who is a dependant.
Funding for home care
If a person's needs can be met through care at home, a different set of financial rules applies.
Capital limits for home care
For home care, the capital limit is lower than for residential care.
- Above the Limit: If you have more than £24,000 in available capital (2024 rate), you can be asked to pay for your own home care up to the maximum weekly charge.
- Below the Limit: If you have less than £24,000, your capital is not considered in the financial assessment. Your contribution will be based on your income.
Maximum weekly charge for home care
In Wales, there is a maximum weekly charge for home care, set at £100 per week for the 2024 rate. Even if the cost of care exceeds this amount, the local authority covers the extra cost.
Potential additional funding and support
Beyond the standard financial assessment, other sources of funding and financial arrangements may be available.
NHS funded nursing care (FNC)
If you require nursing care in a care home, the NHS may contribute towards the cost of the nursing element. This is known as NHS Funded Nursing Care (FNC), and it is not means-tested. The FNC rate in Wales is separate from the local authority's financial assessment.
Deferred payment agreements (DPA)
If you need residential care but your assets, primarily your home, put you over the capital limit, you may be eligible for a Deferred Payment Agreement (DPA). A DPA is a loan from the local authority that is secured against the value of your property, allowing you to defer selling it to pay for your care. The loan and accrued interest are then repaid when your property is eventually sold, which may be after your death.
Third-party 'top-up' fees
If you or your family wish for you to live in a care home that costs more than the local authority is willing to pay, a third party (such as a relative) can pay the difference. This is known as a 'top-up' fee. The local authority must ensure that the third party is willing and able to pay this extra cost for the foreseeable future, as failure to do so could result in the person needing to move care homes.
Comparison of financial rules in Wales
| Aspect | Home Care Funding Rules (2024 rates) | Residential Care Funding Rules (2024 rates) |
|---|---|---|
| Capital Limit | £24,000 | £50,000 |
| Above Limit | Pay up to £100/week (max weekly charge) | Self-fund full cost (unless property disregarded) |
| Below Limit | Capital is disregarded; contribution based on income | Capital is disregarded; contribution based on income |
| Maximum Weekly Charge | £100 per week | No maximum weekly charge; fees vary by home |
| Minimum Income Amount (MIA) | Guaranteed to retain a MIA for living costs | Guaranteed to retain a MIA of £44.65/week (2025/26) |
| Property Considered | Not included in the financial assessment | Included in financial assessment after 12 weeks, unless disregarded |
How to get help and advice
Navigating the care funding system can be complex and emotionally challenging. It's crucial to seek expert advice to ensure you understand your options and entitlements.
- Contact your local authority's social services department to request a needs assessment and a financial assessment.
- The Alzheimer's Society offers free, expert advice on legal and financial matters related to dementia care. You can find out more on their website: Alzheimer's Society - Paying for care in Wales.
- Independent financial advisors specialising in care funding can provide personalised guidance based on your circumstances.
Conclusion
In Wales, paying for dementia care is a means-tested process determined by a financial assessment conducted by the local authority. While you may be required to contribute towards your care, it is vital to understand the different rules that apply to home care and residential care, including the specific capital limits and available support options. Seeking expert advice from organisations like the Alzheimer's Society and independent financial advisors can help you navigate these complex rules and secure the best possible care for your needs.
