Navigating the Process: What to Do When Funds Deplete
For many, moving into a care home begins as a private arrangement, but what happens when personal savings are no longer sufficient to cover the fees? The transition from self-funding to seeking local authority support is a structured, though often stressful, process that requires proactive engagement from the resident and their family. The key is to act well before funds are entirely exhausted to ensure a smooth transition and avoid any disruption to care.
The Local Authority Financial Assessment
The central step in this process is contacting your local authority (or Health and Social Care Trust in Northern Ireland) to request a new financial assessment. This is crucial even if a prior assessment deemed the individual ineligible for support. Circumstances change, and a new assessment is triggered once a person's capital (savings, investments, and in some cases property) approaches or falls below the national threshold. The thresholds vary across the UK.
- England and Northern Ireland: £23,250
- Scotland: £35,500 (with partial funding from £22,000)
- Wales: £50,000
The financial assessment will look at all sources of income, including pensions and benefits, and capital. However, some types of capital, such as the value of your main home, may be disregarded under certain circumstances, for instance, if a partner or a dependent still lives there.
The Care Needs Assessment
Before financial assistance is considered, the local authority will also conduct a care needs assessment to determine if the individual still has eligible care needs. This establishes that residential care is the appropriate and necessary form of support. This is a separate, but equally important, part of the process.
Understanding Your Options
Once the assessments are complete and the individual is deemed eligible for support, several scenarios can unfold. Understanding these will help you plan and manage expectations.
Option 1: Full Local Authority Funding
If the resident's capital is below the lower threshold (e.g., £14,250 in England), the local authority will fund the care, covering the full cost up to their standard rate. The individual will still be expected to contribute a portion of their income (such as pensions), but they must be left with a small personal expenses allowance. The council pays the care home directly and collects the income contribution from the resident.
Option 2: Partial Local Authority Funding (Council Contribution)
If the resident's capital is between the lower and upper thresholds, the local authority provides a partial contribution, and the individual is expected to cover the rest. The calculation for this is based on a "tariff income" from their remaining capital. For example, in England, for every £250 of capital between £14,250 and £23,250, a weekly income of £1 is assumed.
Option 3: Third-Party Top-Up Fees
This option arises if the resident wishes to remain in a care home that is more expensive than the standard rate the local authority is willing to pay. A third party, typically a family member or friend, must then agree to pay the difference. The local authority requires this agreement to be in writing and ensures the third party can realistically meet the costs long-term. It is crucial for the person paying the top-up to understand that these fees can increase annually.
Option 4: NHS Continuing Healthcare
If a person's primary need for care is due to a significant and complex health condition, they may be eligible for NHS Continuing Healthcare (NHS CHC). This is not means-tested and covers all care costs, including accommodation in a care home. An assessment by an NHS Integrated Care Board (ICB) is required to determine eligibility. A Fast Track Pathway can also be used for those with a rapidly deteriorating condition.
What if a Third-Party Top-Up Stops?
If a third-party is paying a top-up fee and their circumstances change, meaning they can no longer afford it, the local authority must be informed. This can trigger a difficult situation. The local authority will review the resident's health and wellbeing before making any decisions about a potential move to a less expensive care home that fits within their budget. While a move is possible, it is not an immediate action, and the authority must find a suitable alternative home that meets the resident's assessed needs.
Can I be asked to leave the care home?
This is a major concern for many families. Generally, a care home cannot evict a resident solely due to financial hardship. The care home will work with the local authority to find a solution. In some cases, a home might accept the lower council rate, or a move to a cheaper room within the same home could be explored. Some care home providers, like Greensleeves Care, offer a 'Home for Life' commitment, meaning residents will never be asked to leave if their money runs out, though eligibility requires assessment at the outset.
The Importance of Acting Early
One of the most important takeaways is to start the process well before funds are critically low. Ideally, this should begin when savings are still above the capital threshold. Early application for a reassessment allows time for the council and care home to make arrangements and ensures there is no gap in funding. It provides reassurance and avoids an emergency situation, which is particularly vital for the resident's wellbeing.
Deprivation of Assets
Local authorities are alert to cases where a person has deliberately given away money or assets to avoid paying care fees. This is called 'deprivation of assets'. If this is suspected, the council can still assess the person as if they still had the asset and charge them accordingly. Seeking professional financial advice is essential to understand the implications of any financial decisions and avoid this complex issue.
The Role of Independent Financial Advice
Navigating the complexities of care home funding is challenging, and seeking independent financial advice can be invaluable. Organisations like the Society of Later Life Advisers (SOLLA) can provide accredited financial advisers who specialise in care funding. They can help explore all options, including care fees annuities or deferred payment agreements. Deferred Payment Agreements (DPAs) are an option in England, Wales, and Northern Ireland where the local authority pays care costs, which are then recovered from the sale of the resident's property after their death.
| Feature | Self-Funding | Local Authority Funding | NHS Continuing Healthcare (NHS CHC) |
|---|---|---|---|
| Funding Source | Resident's own income, savings, and assets | Local council (and resident's income contribution) | NHS |
| Means-Tested? | N/A | Yes | No |
| Capital Threshold | Full funds available | Varies by UK country (e.g., £23,250 in England) | N/A |
| Who Arranges Care? | Resident or family | Local authority | NHS Integrated Care Board (ICB) |
| Top-Up Fees | Not applicable | Required if chosen home costs more than council rate | N/A |
| What Happens When Funds Run Out? | Contact local authority for assessment | N/A | N/A |
Conclusion
The thought of running out of money for care home fees is a significant source of worry, but it does not mean an immediate threat to the resident's place. The process is managed through a formal transition to local authority support, provided the resident meets the eligibility criteria through care and financial assessments. By being proactive, understanding the available options like top-up fees or NHS Continuing Healthcare, and seeking expert advice, residents and their families can navigate this complex period with confidence and ensure a stable and continued standard of care.
