Social care funding: how does it work?
Mark Topps explains what support is available from local authorities, the NHS and the government to help pay for care, and what self-funding options look like.
In England, Wales and Scotland, local authorities are responsible for adult social care and this duty is set out in law. In Northern Ireland, health and social care trusts have this responsibility.
Despite this, there are several ways people can fund their care and support.
Different types of social care funding
Council/local authority funding
If a person is beneath the £23,250 threshold, then they may be eligible for financial support from their local authority.
Another needs assessment will be carried out to determine what contribution the local authority will make e.g., full costs covered, part costs covered or no costs covered. Unlike the financial assessment, this evaluation is carried out by a social worker or occupational therapist and can be requested via adult social services.
NHS funding
NHS continuing healthcare
If somebody has long-term, complex healthcare needs, they may qualify for NHS continuing healthcare funding to cover the cost of care in their own home or within a residential home.
To be eligible for this type of funding the person will need to be assessed several times by a team of healthcare professionals. The assessment looks at each of the following areas:
- Altered states of consciousness
- Behaviour
- Breathing
- Communication
- Continency
- Medication and drug therapies
- Mobility
- Nutrition (eating and drinking)
- Psychological and emotional needs
- Skincare
- Other identified needs.
If eligible, an individual may have access to:
- Fully-funded NHS care
- A joint care package, where costs are split between NHS and the local authority.
As conditions change or new support needs are identified, then a further assessment will be carried out to check eligibility once again.
NHS-funded nursing care
If somebody has been identified that they need to care from a nurse or they’re currently living in a nursing home, they may be eligible for NHS-funded nursing care. This is where the NHS pay for the nursing component of care, directly to a care home.
Similar to the NHS continuing healthcare fund, an assessment will need to be carried out.
Other NHS support
Regardless of income, there are some services that people can access for free, which include:
- Small pieces of equipment for homes (which cost less than £1,000)
Grab rails, commodes, bathing aids etc. - Access to NHS funded care and reablement services
A 6-week service to rebuild confidence and independence, for individuals discharged from hospital going back into their own homes.
Government funding
There are several benefits available to people to support them to pay some of their care fees, which vary if you’re under pension age or over pension age.
It’s expected that the person receiving care will have to cover any remaining costs.
"If a person is beneath the £23,250 threshold, then they may be eligible for financial support from their local authority."
Self-funding
A self-funder is someone who pays for all their social care costs themselves, with no contribution from their local authority. This is usually if an individual exceeds the financial savings threshold of more than £23,250.
To determine if they’re eligible for support or need to self-fund, a person will require a financial assessment, which looks at:
- Earnings
- Pensions
- Savings
- Benefits
- Stocks and shares
- Property and land.
Selling property
If a person is moving into a residential care home or nursing home, they can sell their home to get funds for their care. However, many people prefer to stay in their own environment and receive domiciliary care or have a loved one living with them, so it’s not always a viable option.
Equity release
If somebody is aged 55 and over, they can access funds that are locked up in their home, known as an equity release. However, it involves taking money in one lump sum, in several smaller amounts or as a combination of both. Any money taken has to be paid back with interest, similar to a mortgage, so it can become an expensive option.
Deferred payments
A deferred payment agreement allows someone to use 70-80% of the value of their home to help pay for their care costs, with a local authority paying for the care in advance. A local authority will claim the money back through the sale of a person’s property, before or after they pass away. Somebody will typically need to:
- Be moving into a residential care home or nursing home
- Have savings of less than £23,250
- Have money tied up in property.
Renting property
Some people will choose to rent their owned property to help pay for the cost of their care.
When financial situations change
Some clients will initially pay for their care costs but money will start to run out. It’s important they keep an eye on their financial situation and seek advice where needed.
4-5 months before their savings fall below £23,250, I’d recommend they speak with their local authority about how they may be able to help with payments. The earlier they do this the better, as they could experience delays with having a financial assessment because of the pandemic.
What’s the best way to pay for care?
There’s not a perfect answer for this one, as it will depend on an individual’s financial situation and the cost of their care.
If you or somebody you know needs to consider how to pay for care, I’d recommend seeking advice from an independent financial adviser who’ll be able to make suggestions, offer advice and ensure there’s information on all available options. Once you’ve got all the knowledge you need, you can then make an informed decision.
For more information, have a look at the AgeUK website.
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