Running Out of Money
No-one wins if your money runs out, and you may be asked to move to a different care home. Complete our enquiry form to see how we may be able to secure care and protect assets.
It’s a sad fact that with the absence of good financial planning a time may come when you have used up all of your money and need to rely on your local authority for funding. This page is intended to help you understand what to expect so you can be prepared in advance
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Will I be able to stay in my chosen care home?
The amount that a local authority pays for care will usually be lower than the rate that your care home will charge privately. Each local authority sets its own rates depending upon local conditions and most have frozen or reduced their rates over the past few years.
- Here’s an example.
- Mrs Turner lives in a residential care home in West Sussex charging £600 a week. Her money runs down to the local authority funding limit of £23,250 and she meets West Sussex County Council’s care and financial assessments.
- West Sussex County Council agrees to top up Mrs Turners income to £419 a week (which is its maximum for people in residential care). This means that there is £181 a week or £9,412 a year funding gap.
- The figures will vary from county to county.
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These are the usual options available:
- 1. Continue as before. Mrs Turners care home may agree to accept the local authority contribution as full payment for her fees. This is becoming less common as local authority funding rates are often arguably lower than the cost of providing the care. In this example the care home would be short by almost £10,000 which they can only recoup by increasing the fees of other residents.
- 2. Move to a cheaper room or a shared room. Mrs Turners care home may agree to accept the local authority contribution in full payment of her fees but they may ask her to move to a less expensive room or share with another resident.
- 3. Ask someone else to top up your fees. This is called a ’third party top-up’. Mrs Turner cannot use her own money to ’top up’ the local authority contribution but a third party, such as a family member, can contribute towards her care. The third party will need to accept the open ended nature of the financial commitment and may be required to meet the full cost of fee increases if local authority rates remain frozen.
- 4. Move to a care home that accepts local authority funding. If none of the preceding options are possible Social Services should arrange a care home for Mrs Turner that will accept their funding in full payment although choice of home and location may be limited.
No-one wins if money is allowed to run out. Contact us today for a free consultation to look at ways of securing care and protecting assets.
Below we have explained the actual process for claiming local authority funding.
What Happens First
They will want to do two things:
- 1.Care Assessment ~ Your local authority will need to be convinced that your care needs mean that a care home is necessary. They will not fund a place in a care home if your needs could be met with a home care package.
- 2.Financial Assessment ~ Your local authority will need to conduct an assessment of your financial situation to ensure that you qualify for funding. They are not entitled to conduct a financial assessment on your spouse, partner or family (unless they are agreeing to make a third party top up).
Once your local authority has agreed your care needs and confirmed your financial situation they are then responsible for providing you with with the care required. They will contract directly a care home to pay for your care. They will expect you to contribute your entire income towards the cost of your care, less a personal spending allowance of £22.60 a week.
If you are running out of money because you have given away assets to get state funding the local authority may refuse to fund your care under the deprivation of assets rules.
Tariff Income
The local authority have two funding limits; the upper limit is currently £23,250 and the lower limit is £14,250. For every £250 you have over the lower funding limit you are required to contribute £1 a week towards the cost of your care.
For example, someone with £23,250 will pay £36 a week in tariff income, which works out at a little over 8% of £23,250. Therefore, unless you find a very good investment, your money is likely to erode.
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