Understanding the Three Main Payment Pathways
There are three primary ways nursing home care is paid for in England, depending on a person's individual circumstances.
Self-Funding
If an individual's assets and income exceed certain thresholds, they will be expected to pay for their care in full. In England, the upper capital limit for means-tested support is £23,250. If you have more than this amount in savings and other assets, you are classed as a 'self-funder'. This group pays the full cost of their accommodation and personal care.
Local Authority Funding (Means-Tested)
For those with less than £23,250 in capital, the local council may provide financial support based on a means test. The level of support varies:
- Capital under £14,250: The council will provide financial support, and you will contribute from your assessable income, such as pensions.
- Capital between £14,250 and £23,250: You will contribute from your income plus a 'tariff income'. This assumes an additional £1 per week in income for every £250 (or part of) you have in capital within this band.
NHS Funding
In certain situations, the NHS covers some or all of the costs of nursing home care, and this is not means-tested. There are two key types of NHS funding:
- NHS Continuing Healthcare (CHC): A package of ongoing care arranged and funded solely by the NHS for individuals with a 'primary health need' resulting from a disability, accident, or illness. If you qualify for CHC, all your care home fees, including accommodation, are covered.
- NHS-Funded Nursing Care (FNC): If you live in a nursing home and have been assessed as needing care from a registered nurse but do not qualify for CHC, the NHS will pay a flat-rate contribution directly to the care home to cover the nursing care component of your fees.
The Assessment Process: How is it Decided?
To determine eligibility for state funding, you must first undergo two key assessments:
- Care Needs Assessment: Conducted by the local council to establish what level of care and support you need. This assessment determines whether a nursing home is the appropriate setting for your needs.
- Financial Assessment (Means Test): If the care needs assessment indicates a nursing home is suitable, the council conducts a financial assessment to determine how much, if anything, you must contribute. It considers both your income and capital.
For potential NHS funding, a separate assessment process is conducted to determine if you have a 'primary health need' for CHC or require FNC.
The Financial Assessment: What is Included?
When undergoing a financial assessment, your local authority will look at several financial aspects:
- Income: This includes pensions, certain benefits, and other regular sources of income.
- Capital: This covers savings, investments, and property. The value of your home may be included, but there are certain exceptions, such as if a partner or certain relatives still live there.
- Deprivation of Assets: Councils have rules to prevent individuals from giving away assets or capital to avoid paying care fees. If they believe this has happened, they may still treat you as if you have those assets.
Navigating Special Circumstances and Options
Third-Party Top-Up Fees
If the care home you choose is more expensive than the rate the local authority is prepared to pay for your needs, you may still be able to live there. However, a third party, such as a family member, must pay the difference through a 'top-up' fee. You cannot fund this yourself if you are receiving council support.
Deferred Payment Agreements
Homeowners required to pay for their care can ask the council for a deferred payment agreement. This allows them to delay selling their property and instead have the council pay the fees. The council then recoups the money, plus interest, when the home is eventually sold, often after the person's death.
When Your Savings Run Out
For individuals who start as self-funders, if their capital and savings drop below the £23,250 threshold, they should inform the local council several months in advance. At this point, the council will conduct a financial assessment to determine if they are eligible for local authority support.
Funding Comparison: A Quick Look
| Feature | Self-Funding | Local Authority Funding | NHS Funding (CHC/FNC) |
|---|---|---|---|
| Means-Tested? | N/A (based on assets) | Yes | No |
| Capital Threshold | Over £23,250 | Between £14,250 and £23,250 or under £14,250 | N/A (eligibility based on health) |
| Costs Covered | All care and accommodation fees | Varies based on means-test; may require personal contribution from income. | CHC: All fees. FNC: Flat-rate contribution for nursing care. |
| Primary Requirement | Exceeding capital limits | Financial assessment determines contribution | Health needs assessment confirms eligibility |
Taking the Next Step: How to Start
If you or a loved one requires nursing home care, the first step is to contact your local council's adult social care department to request a care needs assessment. This will formally begin the process and provide a clearer picture of the support and funding options available to you. Early planning is crucial to navigating the system effectively.
For more detailed information on paying for care, including the financial assessment and special circumstances, the guidance provided by Age UK is an excellent starting point. You can find comprehensive information on their site Age UK on paying for residential care.
Conclusion
Understanding who pays for nursing home care in England requires navigating a system that combines personal wealth, local council support, and targeted NHS funding. Your eligibility for financial assistance hinges on your assessed care needs and a means-tested financial assessment. By understanding the different funding routes, from self-funding to NHS Continuing Healthcare, you can make informed decisions and secure the right level of care without unnecessary financial stress.
