Have You Ever Wondered How Care Costs Are Covered in Later Life?
Moving into a care home or receiving support at home is a significant life event, and many pensioners worry about how they will afford care. Will your pension cover the costs? Do you have to sell your home? Are there any benefits available to help?
At Home Instead New Forest, we understand that navigating care fees can be overwhelming. This article breaks down everything you need to know about paying for care, including state support, local authority contributions, and NHS funding.
Will I Still Receive My Pension in a Care Home?
Yes. Whether you receive the Basic State Pension or the New State Pension, your payments will continue if you move into a care home. However, if your care is funded (fully or partially) by the local authority, NHS, or other public sources, you may need to contribute a portion of your pension towards care fees.
Your Personal Expenses Allowance (PEA) ensures that you keep a small amount of money for personal use. In England, this allowance is £30.15 per week. Different rates apply across the UK.
What Happens to Other Benefits?
When moving into a care home, some benefits continue, while others may be reduced or stopped depending on how your care is funded.
Benefits That Continue
- State Pension – Paid as usual, but may be used for care contributions.
- Personal Expenses Allowance – Money for personal use.
- Pension Credit – If eligible, this can provide additional financial support.
Benefits That May Stop or Be Reduced
- Attendance Allowance (AA), Personal Independence Payment (PIP), and Adult Disability Payment (ADP) (Scotland) – The daily living component stops if your care is publicly funded, but the mobility component continues.
- Universal Credit – This stops when moving into permanent residential care.
- Working Tax Credit – May continue for a short period if you were receiving it prior to moving into care.
If you leave a care home temporarily (for example, to visit family), your full benefits may be reinstated during that time.
Do I Have to Pay for Care? Understanding Financial Assessments
Care services are not automatically free. If you need residential care, the local authority will conduct a care needs assessment. If you qualify for support, a financial assessment (means test) determines how much you need to contribute.
Savings and Capital Limits (England)
- Over £23,250 – You must pay for your care in full.
- Between £14,250 and £23,250 – The local authority may contribute, but you will pay part of the cost.
- Below £14,250 – The local authority funds your care, but your income (including your pension) may be used to cover part of the costs.
Thresholds differ across the UK, so check with your local council for accurate figures.
How Can I Pay for Care?
If you are responsible for paying for your care, you have several options:
Using Pensions and Savings
Many pensioners use their state and private pensions, along with savings, to cover care costs.
Selling Property
If you move into a care home permanently and your home is included in your means test, selling your property may be necessary to cover the costs.
However, your home is NOT included in the financial assessment if:
- Your spouse or partner still lives there.
- A dependent under 16 or a relative over 60 lives there.
- You are only staying in the care home temporarily.
Deferred Payment Agreements (DPA)
A DPA allows you to keep your home while the council covers care costs, reclaiming the money later (usually when the house is sold).
NHS Funding for Care
Some individuals qualify for NHS-funded care, which can cover care home fees either partially or in full.
NHS Continuing Healthcare (CHC)
If you have significant ongoing health needs, the NHS may fully fund your care home placement. You can request an assessment from your local NHS Integrated Care Board.
NHS-Funded Nursing Care
If you do not qualify for CHC but still require nursing support, the NHS may contribute to your care home costs.
Understanding Top-Up Fees
If you choose a care home that charges more than the local authority’s standard rate, you may need to pay the difference. These additional costs, known as top-up fees, must be covered by a third party (e.g., family members). You cannot use your pension or savings for top-up fees if the council funds your care.
Can I Gift My Assets to Avoid Paying for Care?
Some people consider gifting their home or savings to family members to avoid care costs. However, this is known as deprivation of assets, and the local council can still count the value of the asset in their assessment. If they suspect deliberate deprivation, they may refuse to fund your care until the costs are recovered.
What Happens If I Run Out of Money?
If your savings fall below £23,250, you can apply for council assistance. It is advisable to contact the local authority three months before reaching this threshold to ensure continuous funding for your care.
Choosing a Care Home: Do I Have a Say?
If the council funds your care, they will offer at least one care home option that meets your needs. If you prefer a different (more expensive) home, a top-up fee may be required.
For those funding their own care, there is complete freedom to choose a care home that best suits personal preferences and requirements.
Temporary or Respite Care: How Is It Funded?
If you require short-term care, a financial assessment will determine if you need to contribute. Some temporary stays (such as respite care) may be fully or partially funded.
Where to Get Advice and Support
Understanding care costs and funding options can be complex. If you need further guidance, these organisations can help:
- Age UK – Advice on care funding and benefits: 0800 678 1602
- Turn2us – Free benefits calculator and financial advice: www.turn2us.org.uk
- Citizens Advice – Support with legal and financial issues: www.citizensadvice.org.uk
You can also contact your local authority for a care needs assessment and financial support queries.
Final Thoughts
Understanding how care costs are covered can make a significant difference when planning for later life. Whether you are self-funding, receiving local authority support, or exploring NHS-funded options, knowing your entitlements ensures that you or your loved one can access the best possible care without unnecessary financial worry.
If you or a family member need expert home care services in New Forest, Home Instead is here to help. Our compassionate team offers personalised support, allowing seniors to live comfortably and independently at home for as long as possible.
For more information, visit Home Instead New Forest or call us today.
