Understanding the Care Funding System in Wales
Navigating the social care system can be complex, and the rules in Wales differ significantly from other parts of the UK. The first step in understanding how to avoid care home fees in Wales is to grasp the core principles of the financial assessment process, which determines who pays for what. This assessment follows a needs assessment conducted by your local authority. The crucial figure to remember is the capital limit.
In Wales, if your total capital (including savings, investments, and property) exceeds £50,000, you are generally expected to pay for your own residential care in full. If your capital falls below this limit, the local authority will help with the costs, but you will still be expected to contribute from your income, like your state pension. For many, the family home is the most significant asset, and its value can push total capital well over this threshold.
NHS Continuing Healthcare (CHC): The Full-Funding Option
One route to avoid care home fees entirely is eligibility for NHS Continuing Healthcare. This is a package of care funded solely by the NHS for adults with a primary health need.
Eligibility Criteria for CHC
To be eligible for CHC, a team of healthcare professionals assesses your overall care needs, focusing on the nature, intensity, complexity, and unpredictability of your health issues. Eligibility does not depend on your specific condition, but rather on the overall impact of your health needs. If your primary need is deemed to be a health need, the NHS will fund your care, regardless of your assets. This funding can cover care in your own home or in a care home setting.
How to Get Assessed for CHC
- Initial Screening: An initial assessment is conducted by a healthcare professional using a 'Checklist'. This determines whether you need a full assessment.
- Full Assessment: A multidisciplinary team (MDT) uses a 'Decision Support Tool' to evaluate 12 care domains, including breathing, mobility, and cognition.
- Outcome: If you have at least one 'priority' need or severe needs in two or more domains, you are likely to be eligible for CHC. The decision should be communicated clearly, with reasons for the outcome.
The Rules Around Deprivation of Assets
Local authorities in Wales can, and will, investigate if they believe you have deliberately reduced your assets to avoid or reduce care fees. This is known as 'deprivation of assets'.
What Counts as Deprivation?
Common examples include:
- Giving away money or property to family members.
- Spending money extravagantly, for instance, on luxury items or gambling.
- Putting assets into a trust that cannot be revoked.
- Selling property for significantly less than its market value.
Consequences of Deprivation
If the council proves that a deprivation of assets occurred, they can legally act as though you still own the asset (referred to as 'notional capital'). This can result in you being forced to pay for your care, even though you no longer have the funds. The council can also seek to recover the funds from the person who received the asset. The timing and motivation behind the transfer are crucial factors in the council's decision.
Legal Strategies to Protect Your Home
For many, the family home is the largest asset at risk. Several legitimate strategies exist for protecting your property from being used to pay for care fees, particularly if planned well in advance.
Protective Property Trusts and Tenants in Common
If you own your property jointly, you can hold it as 'tenants in common' instead of 'joint tenants'. With tenants in common, each person owns a defined share (usually 50%). You can then create a 'Protective Property Trust' within your will. When the first person passes away, their share of the property is placed in trust for beneficiaries (e.g., your children), rather than passing directly to the surviving partner. The surviving partner can continue to live in the property, but the deceased's share is protected from a financial assessment for care fees.
Home Occupancy Exemptions
The value of your home is disregarded in a financial assessment if it is occupied by certain individuals, including:
- Your spouse, partner, or former partner.
- A relative aged 60 or over.
- A disabled relative.
- A child under 18.
Deferred Payment Agreements
A deferred payment agreement (DPA) is a scheme offered by local authorities. It allows you to delay paying for your care home costs by using your property as security. The fees are paid to the council upon the sale of the property, typically after your death. This enables you to avoid a forced or rushed sale of your home to pay for your care immediately.
Maximising Your Income and Benefits
Even if you are required to contribute towards your care fees, you will be left with a Minimum Income Amount (MIA) for personal expenses. In Wales, this is currently £44.65 per week for residential care (2025/26 rate). It is important to ensure you are receiving all eligible state benefits to maximize your income, as certain benefits may be disregarded or partially protected.
Comparison of Funding Options
| Feature | NHS Continuing Healthcare (CHC) | Local Authority Funding | Self-Funding | Protective Property Trusts |
|---|---|---|---|---|
| Cost | Free (funded by NHS) | Means-tested contribution from income | Pay all costs | Set-up costs + legal fees |
| Eligibility | Primary health need assessed by MDT | Capital below £50,000 (Wales) | Capital above £50,000 (Wales) | Joint homeowners willing to become 'tenants in common' |
| Asset Protection | 100% protection (no financial assessment) | Partial, depends on income and capital | None | Protects half of the property's value |
| Main Risk | Eligibility can be revoked if needs change | Asset value can still be significantly depleted | Loss of all assets above threshold | Must be set up correctly and in advance |
| Key Benefit | Comprehensive care at no cost | Reduced fees for those with limited assets | Control over choice of care home | Ring-fences a portion of the family home for beneficiaries |
Expert Advice and Proactive Planning
For most people, the key to protecting assets is professional advice and proactive planning. Consulting with an experienced solicitor or a specialist financial advisor is essential to understand your options and ensure any arrangements are legally sound. Waiting until care is an imminent need can significantly limit your choices and increase the risk of a deprivation of assets challenge.
For more detailed information on the financial assessment process in Wales, you can visit the official Welsh Government guidance on charging for social care: Charging for social care | GOV.WALES.
Conclusion: Your Next Steps
Effectively addressing care home fees in Wales requires a multi-faceted approach. Start by understanding the £50,000 capital threshold and the potential for a full NHS Continuing Healthcare assessment if your needs are primarily health-related. If a financial assessment is likely, explore legal options for protecting your property, such as becoming tenants in common and establishing a Protective Property Trust. Early planning, ideally before any need for care becomes apparent, is the most effective way to secure your assets for the future and ensure peace of mind.
