Your Financial Situation and the Means Test
For many residents in the UK, nursing home care is initially self-funded. You are considered a 'self-funder' if your capital is over £23,250 (in England). Capital includes savings, investments, and in some cases, property. However, this private funding is not infinite, and anticipating when it might run out is a vital part of financial planning for later life. As your assets approach this threshold, you should contact your local authority to request a needs and financial assessment.
The Importance of a Timely Assessment
It is highly recommended that you or a relative contact the local council three to six months before your savings fall below the threshold. Proactive engagement with the council ensures that a care needs and financial assessment can be carried out in time, preventing a gap in funding. The local authority is legally obligated to support individuals with eligible care needs who cannot afford to pay for it themselves, under the Care Act 2014. Waiting until your money has completely run out before contacting the council may lead to delays and unnecessary stress.
Potential Funding Options and What to Expect
Once your financial assessment shows you are eligible for assistance, several funding options may become available. The outcome often depends on the level of care required and your specific circumstances.
Local Authority Funding
If your assets drop below the capital limit, your local council will step in to provide funding towards your care fees. The amount the council will pay is based on its own financial assessment and local rates. This can sometimes mean that the council's standard rate is lower than the fees of the nursing home you are currently in. In such cases, you may have a few options:
- Third-Party Top-Up Fees: A family member, friend, or sometimes a charity, can pay the difference between the council's contribution and the home's fees. This is a significant commitment, as the person paying the top-up will need to sign a contract and be responsible for any future increases.
- Moving to a different room: Some nursing homes may allow you to move to a less expensive room to bridge the funding gap.
- Relocating to a council-rate home: If no third-party top-up can be arranged and the current home is unwilling to accept the council rate, you may need to move to a different nursing home that accepts the local authority's funding as full payment. The council must offer at least one suitable option.
Deferred Payment Agreements (DPA)
A DPA is an arrangement with the local authority that can help bridge the gap if most of your assets are tied up in your property. The council agrees to pay for your care home fees, and the resident repays the amount later, typically from the proceeds of the property sale, either during their lifetime or after their death. Interest may be charged on the deferred amount, and the council will place a legal charge on your property.
NHS Continuing Healthcare (NHS CHC)
For individuals with complex, ongoing healthcare needs, NHS CHC is a package of free care funded entirely by the NHS. Eligibility is based on a primary health need, not a financial one. If you have significant health needs, you should ask for a free assessment, as qualifying means the NHS covers all care home fees, including accommodation. The process can be complex, but can alleviate all financial burdens if successful.
NHS-Funded Nursing Care (FNC)
If you do not qualify for full NHS CHC but still require nursing care from a registered nurse, the NHS may pay a flat-rate contribution directly to the care home. This payment does not cover all fees but can help reduce the overall cost you or the local authority have to pay.
Alternative Strategies to Consider
Beyond the primary funding routes, other steps can help manage the financial transition. Exploring all avenues is essential for a smooth process.
- Claiming Benefits: Ensure you are receiving all eligible benefits, such as Attendance Allowance (for those over state pension age with care needs). While this is a non-means-tested benefit, your eligibility may change if the council takes over funding.
- Seeking Independent Financial Advice: The care fees system can be complex. Consulting a specialist financial advisor, especially one with a CF8 qualification or who is a member of the Society of Later Life Advisers (SOLLA), can provide peace of mind and tailored guidance.
- Reviewing the Care Home Contract: Critically examine your contract with the nursing home, ideally before the funding becomes a problem. Some contracts may contain clauses addressing what happens if a resident's funding switches from private to local authority rates.
Navigating the Process of Changing Funding
| Step | Action Required | Responsible Party |
|---|---|---|
| 1. Request Needs Assessment | Contact the local authority adult social services department and ask for a Care Needs Assessment, ideally 3-6 months in advance. | Resident or appointed representative |
| 2. Undergo Assessment | Participate in the assessment, providing all necessary health and financial details. | Local authority |
| 3. Await Decision | Receive the outcome regarding care needs eligibility and financial contribution. | Local authority |
| 4. Explore Funding Gap | If a shortfall exists, discuss options like top-ups or moving rooms with the current care home. | Resident and family |
| 5. Confirm Future Care | Finalise arrangements, whether staying with a top-up or relocating to a council-funded home. | Resident and local authority |
It is important to remember that communication is key during this potentially difficult time. By engaging with your local council and nursing home early, you can explore and secure the best possible outcome. For further information and support, you can contact independent charities like Age UK for expert advice on navigating the care system, ensuring you understand your rights and options.
Conclusion: Prioritising a Smooth Transition
Running out of money while in a nursing home is a common concern for many, but it does not mean an automatic eviction. The UK social care system is designed to provide a safety net, ensuring continued care for those who become financially eligible for support. Taking proactive steps, such as requesting a needs assessment well in advance of your savings dipping below the capital threshold, is the most effective way to manage this transition. By understanding the role of the local authority, exploring funding options like DPAs or NHS CHC, and maintaining open communication with all parties, you can ensure a smooth transition and maintain a high standard of care for yourself or a loved one. The key is planning ahead and knowing that there is support available to prevent financial hardship from disrupting essential care.
