If there is no eligibility for NHS continuing Healthcare the local authority should undertake a financial assessment. This assessment will gather information about an individual’s income and capital. If following an assessment an individual has, in England, assets of less than £14,250 they will pay something from their income, with local authorities covering most of the cost for social care. But, if they have more than £23,250 in assets they will pay for all their care. In Wales, the limit is more generous at £50,000.
It is therefore important to know what is included to determine the value of an individual’s assets and income.
Generally, all income will be considered save for some disability benefits. All earned income and pension income will be included. It is important that all benefits are claimed as the financial assessment will assume that an individual is in receipt of all the benefits they are entitled to. The individual will be left with a set amount out of their income known as Personal Expense Allowance in England and Minimum Income Amount in Wales. Currently this is £25.65 in England and £35.00 in Wales.
With capital savings, investments (such as stocks and shares) and property are generally considered. Generally, personal possessions and the value of any life assurance policies are not included in the means test. For many people their biggest asset is their home. If the individual is receiving care in their own home then the value of the home is not included in the financial assessment. If the individual is receiving care in a residential setting usually the value of their home will be included in the financial assessment after a 12-week disregard. However, there are several exceptions to this. The guidance does allow for a number of disregards which are if any of the following are living in the property:
- the individual’s spouse, partner, or civil partner
- a dependent
- a close relative aged 60 or over
- a close relative who is:
- receiving Attendance Allowance, Disability Living Allowance, Personal Independence Payment, Incapacity Benefit, Severe Disablement Allowance, Armed Forces Independent Payments, Constant Attendance Allowance, or a similar benefit, or
- not receiving one of these benefits but would meet the criteria for one of them.
So, if an individual’s home is to be considered, many people are concerned this will mean the home will need to be sold to pay for care fees. This is not the case. The local authority may agree to pay the care home fees and then reclaim the money when the property is sold or after death. This is called a Deferred Payment Agreement (DPA). This involves placing a charge on the property.
The local authority may offer a DPA if:
- they’ve assessed the individual’s needs and agreed that they need to be in a care home
- not including their home, they have capital of less than £23,250 (England) or £50,000 (Wales)
- their home is not disregarded.
There will likely be administration charges and interest. This should be fully explained in writing. It is important to consider entering into a DPA carefully.
Finally, whilst above I have highlighted a number of disregards even if none seem to apply the local authority does have the ability to apply discretion, so it is important to engage with the local authority and ask for a discretion if you feel you have reasonable grounds to.
Whilst the £86,000 cap was not what it seemed, it did provided families with some certainty in a difficult time. It remains to be seen, what will happen next. However, families cannot endure another decade of uncertainty and the UK Government should at the very least increase the threshold which in contrast has doubled to £50,000 in Wales to provide a little relief in such difficult times.
However, it’s important families are aware of NHS funding – called NHS Continuing Healthcare – which will pay the full cost of care and is available to those who have high and complex health needs regardless of their wealth. Many people are unaware of NHS funding or simply accept the NHS decision, when it should be challenged.