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Paying for residential care

Eligibility for funding for residential care

If you have capital and/or savings of more than £23,250 you will probably pay the full cost of your care until your capital / savings drop below this amount. This includes, but is not limited to:

  • savings in bank / building society accounts
  • stocks, shares or unit trusts
  • premium bonds
  • National Savings
  • cash
  • value of property and land
  • any property you own will usually count as one of your capital assets

If you have less than £23,250 but more than £14,250 in assets, savings or investments, you will pay a contribution to your care costs.

If your capital and savings are below £23,250 and you have a high level of needs, we will contribute to the cost of your care. You must have a financial assessment to work out how much you will pay.

When the value of your main or only home is excluded

The value of your home will be excluded if:

  • your partner, former partner or civil partner, except where you are estranged, continues to live there or,
  • a lone parent who is your estranged or divorced partner continues to live there or,
  • an eligible relative aged 60 or over continues to live there or,
  • an eligible relative who is incapacitated continues to live there or,
  • your child under 18 continues to live there or,
  • other special circumstances.

If your savings are less than £23,250, and you own your own home, its value is usually not included in the financial assessment for 12 weeks from when your care starts.

Self-funding residential care

If you pay the full cost of your care yourself, you are known as a self-funder. More information on self-funding.

We strongly advise you to seek specialist financial advice from a qualified independent financial adviser. They can make sure that you are aware of your options for paying for your own care.

How people pay for care

People who fund their own care, usually pay for their care fees in the following ways:

  • using savings and /or income from investments
  • selling their home and using the proceeds to pay their care fees
  • renting out their property
  • purchasing a care fee payment plan: you pay a lump sum to an insurer who will then guarantee to cover residential and nursing care fees for the rest of your life

We can provide information about services and our assessment and charging processes. However, we cannot give you financial advice.

Respite care

People taking short term or respite stays in care and nursing homes are assessed and charged on the same basis as if they were receiving care in their homes. You should not therefore experience any change to your weekly assessed charge in these circumstances.

Care home charges

Care home costs can vary from home to home. If the council is contributing towards the cost of your care, your choice of care home will be limited to those that accept our funding level.

If the home you have chosen charges more than the council’s contribution, you must find someone to help pay the difference (see third party top-ups, below). The law states that you are not allowed to make this additional payment yourself, except in limited circumstances. The responsibility for this often falls to a member of your family or a benevolent sponsor, such as a charity.

If the person making these extra payments cannot continue to make these in the future, we may not automatically pay the difference. If the home will not accept a lower rate, you may need to move to a less expensive care home.

If you pay the full cost of your care home fees, arranged it without our assistance and the care home fees are higher than the council’s funding level, you will need to think about how the fees will be paid if your capital and savings are likely to fall below £23,250 in the future.

If your capital is less than £14,250 and the home you choose charges fees within our funding rate, your contribution will be assessed on your income only.

Deprivation of assets

Giving away your assets, such as property or money, to avoid paying care costs is called ‘deprivation of assets’.

We will investigate, if you give away your money, or other assets, before or while you are living in residential care. If you sell an asset at less than market value, we must investigate this too. If deprivation has occurred it may mean we treat you as still having the asset you gave away.

Help paying for residential care

We will help with costs during the first 12 weeks of permanent care if:

  • your former home is included in your financial assessment
  • your other capital is less than £23,250
  • your income is not enough to meet your care home fees
  • we agree that you need care

We will calculate your contribution during this period based on your income and remaining capital.

Deferred payment of care home fees means you do not have to sell your home in your lifetime to pay your care home bills.

Care home payments are made by the council on your behalf as an ongoing loan, using your home as security.

The funds loaned are repaid either when you sell your home, or after your death.

After the twelve-week property disregard period, your care costs will be charged against the value of your home and recovered once your house has been sold.

If your savings or capital are less than £23,250, you are entitled to keep an allowance from your income and benefits. The remainder is usually required as your contribution towards your care home costs. It is always best to obtain independent financial advice to help you decide how best to manage and arrange your finances to pay your care home fees.

  • If you need nursing care, NHS Cambridgeshire and Peterborough may pay towards the nursing element of your care costs. This is tax-free and non-means-tested.
  • If you need high levels of health care, you may be able to get your full care costs paid for by the NHS under the criteria for continuing health care.

Depending on your needs and circumstances, you may be entitled to:

  • Income Support
  • Pension Credit
  • Attendance Allowance if you are over 65 with disability-related care needs
  • Personal Independence Payment if you are under 65 with disability-related care needs

Your local Citizens Advice Bureau can help you with benefits advice. You can also see our information on benefits for adults and older people.

Third party contributions (top-up payments)

If the care home you choose costs more than we usually pay for a person with your needs, someone will have to make up the difference. This extra payment is often referred to as a ‘top-up’ or ‘third party top-up’.

It is against the law to make this payment yourself. The only exception is when your placement is for a 12-week property disregard or for a deferred payment. The responsibility for this often falls to a member of your family or a benevolent sponsor such as a charity. Once confirmed, the person or organisation must sign a formal agreement.

Paying for care is a complex area. We recommend you get independent financial advice.

If you are eligible for a financial contribution from the council, but the fees at the home you choose are more than this, a third-party can make up the difference.

A third-party contribution is a weekly amount paid by someone - often a relative, friend, or organisation - towards the cost of residential or nursing home care fees when the fees are higher than the maximum amount we will contribute.

An agreement must be signed by whoever is paying the third-party contribution.

You do not have to choose a residential or nursing care home that charges more than we will contribute. Some homes charge the same amount that the council pays so there is no need for a third-party contribution.

If you live in a residential or nursing care home permanently, you cannot usually pay the third-party contribution out of your capital or weekly personal allowance. There are two exceptions:

  • if you have agreed a ‘12 week property disregard’ arrangement with the council,

or

  • we have agreed a deferred payment agreement with you.

Relatives, friends, other individuals and organisations can pay third-party contributions. Voluntary organisations can also help in some situations. Whoever pays a third-party contribution must be able to show that they are willing and able to pay the difference between the amount the council is able to contribute for a person with your needs and the fees the care home actually charges.

You may have to move to another residential or nursing care home that charges the same amount as we can contribute.

If people become unable to pay third-party contributions, they must let managers of residential and nursing care homes know immediately.

They must also let us know straight away – our contact details are at the bottom of the page.

We will review contributions each year. If a third-party contribution increases before the planned annual review, it is vital that the person paying the third-party contribution informs us.

Council staff are responsible for talking through this information fully with you and whoever has agreed to pay a third-party contribution. We will record that we have done this and that you and whoever has agreed to pay a third-party contribution understood your responsibilities.

If we are contributing to your care costs, we have the right to ask about your financial situation. We cannot ask people who are paying third-party contributions about their financial situation. However, we must ensure they are able to make contributions for as long as people remain living in residential and nursing care homes.

Changes to your financial situation

If the council is contributing to the cost of your care you must tell us as soon as possible if your income or capital increases or decreases significantly during the year.

If you are a self-funder and your capital is likely to reduce to £23,250, you must let us know well in advance.

We recommend contacting us when your capital is approximately £28,000.

Contact us about approaching funding threshold - online form

Telephone: : 0345 045 5202

9am to 5pm, Monday to Friday