A Financial Assessment comes after a Care Needs Assessment has been carried out.
Once the services needed are agreed, the council will need to carry out this financial assessment. It determines how much your parent or relative will need to contribute to pay for their own care.
Where care needs are social (assistance with daily living) and, in England, where individual assets are below £23,250, the local authority will assess which one of three categories your parent may fall into in terms of care.
Generally, the higher the level of need, the greater the assistance of Local Authority Funding which ranges from:
- Home based care with support in the home
- Intermediate care/transitional care designed to help people stay/remain independent-this is only temporary
- A place in a residential care home
Here we explain more about a Financial Assessment:
- Which assets are taken into account?
- What are the thresholds for eligibility?
- Personal Health Budget and direct payments
- Paying for carers
- Residential/nursing home fees
- Grants for home alterations
Which assets are included in the Financial Assessment?
All income (property, investments, pensions and benefits); bank and building society accounts, National Savings and premium bonds; stocks and shares; shares in family businesses; regular savings including ISAs.
Thresholds for eligibility in the UK
Current thresholds for eligibility in England are £14,250 in capital for maximum support. Contributions towards care at home will be made for anyone with capital up to £23,250.
Anyone with more than £23,250 is not eligible for means-tested support. (In Northern Ireland, personal care is free to those aged over 65 who their local authority have assessed. The same applies in Scotland for personal care.)
For more information on the situation in Scotland visit the Care Information Scotland “Where to Start” page.
In Wales, savings above £23,750 mean they will have to pay all of the fees for their care at home or £50,000 (care in a care home)
Read The Money Advice Services’ useful advice regarding the asset limits in financial assessments to get a better understanding.
Personal Health Budget and direct payments
If your parent qualifies for help with costs they will be offered a Personal Health Budget and related direct payment, as part of the Government’s move to ‘personalise’ social care. If your relative has been assessed as needing non-urgent help and support, they will also be allocated a personal budget.
They can decide how they receive the money (direct cash payments, council managed account, in a trust) and how they spend it. There is no fixed sum and the amount received is based on their Needs and Financial Assessments. Direct Payments can only be spent on care that has been agreed in needs assessments and records/receipts must be kept to show exactly how the money has been spent.
Paying for carers
If your parent uses direct payments to employ a carer, they will take on responsibilities as an employer. That means tax, national minimum wage, sickness and holiday pay, and liability insurance.
Whether they employ someone for a few hours a week or full time, the same rules apply.
If that sounds a bit daunting, there are people and organisations that can help. Look at local firms who offer payroll services. They’ll handle tax and National Insurance contributions for a fee.
Think about using a home care agency. They’ll deal with all the paperwork, including references and criminal checks, and invoice your parent directly. (Have a look at our guide to hiring a carer/care agency.
If you have a Lasting Power of Attorney, Local Authorities must offer direct payments to you to act on behalf of your relative.
Residential/Nursing Home Fees
Local Authorities have a responsibility to arrange residential care for everyone who is assessed as needing it and who are unable to make their own arrangements. And they also have a responsibility to contribute to the cost of care for people who fit their eligibility criteria and cannot afford to fund themselves.
The average weekly cost of a place in a residential home in England is approximately £630. A place in a nursing home costs around £730 per week. Almost half of the people who currently live in residential homes are fully self-funded and just over one third are fully local-authority funded.
The rules around funding for residential care are based on a complicated means-tested system. So some people with complex medical needs receive free NHS Continuing Care, but most will have to have a financial assessment from the local authority.
Even if your parent is self-funding their care home, they may still be able to claim some contributions in the form of Attendance Allowance, Disability Living Allowance or Personal Independent Payment.
Should the unthinkable happen, and your parents savings start to run out to the point that it takes them below the current thresholds for continuing to afford their care, they then become eligible for local authority funding. However, they will only fund residential provision for assessed needs.
If your parents have chosen a care home that meets the care needs in their local authority care plan, they are more likely to get funding should their financial situation change in the future. (The assumption if they are self-funding your own care home is that they are likely to choose one that is more expensive than that selected by the local authority). However, they should not have to move homes.
LA Grants for Home Alterations
Local Authorities can help with funding home alterations and repairs. The first step is to get a professional assessment of the needs. An occupational therapist is most likely to undertake the assessment. If they recommend alterations that will cost less than £1,000 social services will often provide and fit these free of charge, although they might also be funded by your relative’s personal health budget.
If the proposed alterations are major and will cost more than £1,000 you/your relative can apply for a grant from the council to help with the costs. All local authorities in the UK offer grants to help disabled people modify their homes and live more independently and it is called a Disabled Facilities Grant (DFG).
In Scotland, there is a similar grant called a Scheme of Assistance. The kinds of alterations the grant will fund include installation of a stair lift, fitting hand rails, making outside steps easier to use or installing ramps. Have a look at our section of making the home safer and easier to live for useful tips and guidance.
See more in our Complete Guide to Care Needs Assessment
Struggling to get the care you think you’re entitled to from the local authority funding? Or do you have a positive experience to share? Please join our forum and share your experience.
Age Space Podcasts on funding care
Did you know we have Age Space Podcast episodes looking at aspects of funding care? In recent episodes with finance expert Jason Butler, we discuss the state benefits available for those in care, as well as those caring for others, and NHS Continuing Care.