Understanding the Care Home Funding System in Scotland
The funding system for care homes in Scotland can be complex, with costs split between the local council and the resident. Unlike some other parts of the UK, Scotland offers free personal and nursing care to all adults who have been assessed as needing it. However, this does not cover the entire cost of living in a care home, and many people will need to contribute towards their accommodation and other expenses.
The Care Needs and Financial Assessment
Before any funding can be determined, a local council's social work department will carry out two critical assessments:
- Care Needs Assessment: This assessment, often conducted by a social worker, identifies the individual's specific care needs and determines if a care home is the most suitable environment to meet them. It is the first step toward accessing any financial support.
- Financial Assessment (Means Test): This test evaluates the individual's income and capital (savings, investments, and property) to calculate their contribution toward the care home fees. The council will disregard certain types of income and capital, but the value of a property can be included under specific circumstances.
Free Personal and Nursing Care Explained
A cornerstone of care funding in Scotland is the Free Personal and Nursing Care policy. Regardless of a person's income or assets, if they are assessed as needing personal or nursing care, the local council will make a direct payment to the care home to cover this portion of the cost. As of April 2025, the rates for this contribution are:
- Free Personal Care: £254.60 per week
- Free Nursing Care: £114.55 per week
It is crucial to understand that these payments cover only the personal and nursing elements of care, not the accommodation and daily living costs, which are still subject to a financial assessment.
Local Authority Funding (Means-Tested Support)
If the financial assessment reveals that an individual's capital is below the set threshold, the local council will contribute towards the accommodation costs. For the 2025/26 financial year in Scotland, the capital limits are:
- Lower Limit (£22,000): If your capital is below this amount, it is ignored in the calculation. You will only need to contribute from your income, minus a Personal Expenses Allowance (£35.90 per week for 2025/26).
- Upper Limit (£35,500): If your capital exceeds this, you will be considered a 'self-funder,' responsible for all costs, except for any Free Personal and Nursing Care payments you are entitled to.
- Between Limits: If your capital falls between these two figures, you will contribute from both your income and a 'tariff income' calculated based on your capital.
Self-Funding Care Home Fees
If an individual's capital exceeds the upper threshold (£35,500), they will be responsible for paying the full care home fees. However, they will still be entitled to the free personal and nursing care payments directly from the local authority.
Third-Party Top-Ups
For residents receiving local authority funding, it is possible to choose a more expensive care home than the council's standard rate. In this scenario, a third party, such as a family member, must agree to pay the difference, known as a 'top-up' fee. This arrangement requires a written agreement and is a long-term commitment. It's important to note that the council must be able to offer a suitable care home option within their standard rate, so a top-up should be out of preference, not necessity.
The Role of Hospital Based Complex Clinical Care (HBCCC)
In Scotland, NHS Continuing Healthcare (CHC) was replaced by Hospital Based Complex Clinical Care (HBCCC). This is for individuals with a 'primary health need' whose care can only be met in a hospital setting. If eligible, NHS Scotland will fully fund the care fees. The assessment is based on the complexity of needs, not the condition itself.
The Impact of Property Ownership
For permanent residents, the value of their main home is included in the financial assessment unless a partner, certain relatives (e.g., a disabled relative or one over 60), or a child under 18 still lives there. The council can offer a 12-week property disregard period to allow for a property sale, during which time they will help fund the care.
Funding Comparison at a Glance
| Funding Scenario | Financial Assessment | Free Care Payments | Accommodation Fees | Capital Threshold (2025/26) |
|---|---|---|---|---|
| Local Authority Funded | Yes (Below Upper Limit) | Yes | Contribution based on income and capital | Below £35,500 |
| Self-Funding | No (Above Upper Limit) | Yes | All accommodation costs paid by resident | Above £35,500 |
| HBCCC | N/A | Full funding (clinical care) | Full funding (accommodation) | N/A (Based on health need) |
Practical Steps to Securing Funding
- Contact your local council's Social Work Department to request a care needs assessment as soon as possible. Even if you plan to self-fund, this assessment unlocks entitlement to free personal and nursing care payments.
- Gather financial documents for the financial assessment, including details of income, savings, and investments. For clarity on what will be assessed, visit the Care Information Scotland website.
- Explore third-party top-ups if you wish to choose a more expensive care home than the standard council rate allows.
- Consider specialist advice from organizations like Age Scotland or Citizens Advice Scotland if you find the process confusing.
Conclusion
Who pays for nursing homes in Scotland is determined by a combination of government policy and an individual's financial situation. The Scottish government funds all free personal and nursing care for those assessed as needing it, while local authorities provide means-tested support for accommodation costs. Understanding the assessment process and the different funding avenues is the key to navigating the costs and securing the necessary care.
