Navigating your way through the care planning and funding process can be a minefield. It’s complex, confusing, with ever changing criteria for eligibility. There is not enough support out there for people who are caring for loved ones and this can be particularly worrying for families who need to put care in place for someone they love.
In this article we will break down your options and explore:
Who pays for care and when the local authority will step in
Benefits you may be entitled to and their eligibility criteria
Understanding your options to fund care and what help and support is available
There are around 11 million people in the UK aged 65 years and above and that number is slowly increasing. With that, our ageing population will bring both opportunities and challenges for the economy and ultimately impact public services and welfare spending.
When it comes to funding care, people are often unsure of what they may or may not be entitled to, how care plans work or which way to turn, until the situation facing them becomes critical. This can often cause family members and decision makers to feel pressured into making decisions – meaning they may not always have time to really consider that person’s wishes.
Being informed of your options will help to alleviate some of the worry and help you feel more confident and in control of your future.
Who pays for Care?
There are several options available to cover the cost of care and various criteria’s that need to be met to qualify:
Local Authority Funding is available to those people who have total assets less than £23,250. If your total assets and savings are above the limit you will be expected to pay the full cost of your care until you fall below this threshold.
Self-Funding is defined as a person having more than £23,250 in capital and you will be known as a self-funder and expected to cover the full costs of your care needs. If you are self-funding, appointing a Financial Advisor who specialises in care planning may be very beneficial in helping you work out your options.
NHS Continuing Healthcare Funding (CHC)This could be available to you if you have a high level of care needs or a serious health condition. If you qualify, the NHS will arrange and pay for all the care you have been assessed as needing. This might be provided at home, in a care home or in a hospice. CHC funding is not means tested and is based on individual care ‘needs’. It is not capped so you can expect the cost of care to be covered throughout its entirety.
To begin this process you’ll firstly need to arrange a CHC assessment with the healthcare professionals looking after you. For example your GP or your local Clinical Commissioning Group (CCG). They will determine whether the patients they assess qualify for this NHS funding to help with their care.
There are organisations out there who can help you navigate this process. For example Beacon offer independent help and advice https://beaconchc.co.uk
What benefits are available?
You may also be eligible for benefits like Attendance Allowance and Personal Independence Payment (PIP), these are not means-tested but do have an eligibility criteria:
Attendance Allowance helps you to pay towards care (it does NOT have to be spent on care) and is available for those over State Pensionable age who have a physical or mental disability. The current state pension age in the UK is 66 years for both men and women.
There are two different rates based up what help you need and it’s paid weekly:
Lower Rate £68.10
Higher Rate £101.75
To make a claim, you have to fill out an Attendance Allowance claim form. There are two ways to obtain your form. You can:
Call the Attendance Allowance helpline on 0800 731 0122
When completing the Attendance Allowance form do not underestimate your care needs. It is a rather long form so here are a few tips to help you complete it:
Explain your health needs and disabilities in detail and the effect they have upon other areas of your life and ability to complete daily tasks
Clearly articulate how often you need help and explain what type of help you need
Give account of any recent falls or accidents
Attach any additional information to support your application. E.g. A letter from your GP
Once submitted. you’ll receive a letter advising of the outcome. If successful, a letter will advise how much you will receive and from what date. If you’re not happy with the decision, you can appeal against it.
Council Tax Exemption
If you are in receipt of Attendance Allowance you may be eligible for council tax reduction if you have a permanent mental impairment for example:
Severe learning difficulties
Suffered an impairment due to the injury.
To receive the exemption, you must have a formal diagnosis from your GP and be in receipt of attendance allowance or a similar benefit. For example: the care element of Disability Living Allowance (DLA) (middle or higher rate) and the daily living component of Personal Independence Payment (PIP) at standard or enhanced rate.
PIP is available to people living in England and Wales. You may qualify if you:
Are under State Pension age OR are over State Pension age, but you have previously received PIP
Have difficulties with daily activities and/or mobility because of a disability or long-term physical or mental health condition.
Mobility is defined as “the ability to move or be moved freely and easily”
During assessment, points will be allocated for each daily living activity and mobility component, depending upon how much help you need.
Please note: If you are currently receiving Disability Living Allowance (DLA) you should not apply for PIP until contacted by the Department of Work and Pensions (DWP) because there’s no guarantee you’ll be awarded PIP, and you risk losing your DLA.
What are my options?
Firstly, It is important to check your entitlement. Paying for long-term care for yourself or a family member can be very expensive. According to the UK Care Guide, the average cost of care within residential care homes in the UK can range from 27-39k annually increasing to up to 55k for nursing care. Homecare will vary according to location but you are looking at around approximately £1,100 per week.
There are financial products and other options that could fund your long-term care, so it’s important to get independent financial advice. This could include Immediate Care Plans, Deferred Payment Agreements, Equity Release and Downsizing.
Immediate Care Plan – In short, this is an insurance product that can be bought in exchange for a regular income to cover parts or all of the cost of your care. It is available only via specialist care fee advisors who are qualified experts regulated by the FCA (Financial Conduct Authority)
You could be suitable for ICP if you:
Need funding for care to start immediately or within the next 12 months
Have access to a lump sum to purchase the Immediate Care Plan
Want the certainty of a regular, known income for the rest of your life
You understand that if you die early in the plan, you may not get back the full value of your initial investment
Want to limit the risk of outliving your savings
Want no investment risk
Want to be able to reduce the inflation risk by choosing an escalating income option
Things you should know about an ICP:
You can buy an ICP With a one-off lump sum
The size of that lump sum is calculated individually based on the income you require, your age and your state of health at the time you apply.
All applications are fully underwritten so your medical history will also affect the premium
Equity Release– If you are a homeowner in the UK ages over 55 years, you may qualify to release money (equity) that is tied up in your property. This can be arranged in either a larger lump amount or smaller amounts – or both.
There are a couple of release options available:
Lifetime mortgage – A popular equity release plan, giving the homeowner access to cash that is tied up in their property. The fixed term will run for the rest of your life and during that time the home remains 100% in your name.
Home reversion plan – This is where part, or all the homeowners’ property, is sold to the plan provider in exchange for a tax-free lump sum, or regular payments.
Downsizing – By selling your home and buying something smaller and less expensive, you could free up some cash that can help towards paying for your care.
Deferred Payment Agreement– A financial agreement that allows people to delay expenses, relating to long-term care for elderly or disabled and is designed to help you cover the cost of care whilst ensuring you don’t have to sell your home.
Note: Deferred Payment Agreements are offered by local authorities and only available for those going into a care home (not Homecare)
Society of Later Life Advisers is a not for profit organisation “dedicated to higher standards and accessibility to regulated financial advice for older people and their families can help you to find accredited financial advisers’. They will guide you to support financial planning in the later years and are committed to promoting and raising awareness of financial issues faced in retirement and later life.
Age Space is a fantastic resource sharing a multitude of information from fall prevention blogs to links for legal and financial advice. A great one stop shop for help and support for anyone who is looking after an elderly relative.
And finally, we urge you to speak with a regulated financial adviser who will be able to brief you on the options available to you, to plan and fund your care. We understand the stresses, strains, highs and lows, of caring for a loved one and know that the right support is often not there for the people who need it. Use the tick box below as a way of reminding yourself of the areas to explore and what you may be entitled to. You Are Not Alone.