Paying Care Home Fees

Created: 4/22/2022

What Care Home Fees Have to be Paid?

When a loved one moves into a care home, they may be responsible for paying some or all of their care home fees. A local authority will undertake a comprehensive assessment to make that determination.  It all depends upon how much capital (money or other assets) or income they have. Care home fees can be very expensive (sometimes thousands of pounds a week), and it is not always the state's responsibility to pay them. There are rules that determine what fees a person has to pay, and what fees the state, (usually a local authority) has to pay, but be warned, the local authority has powers to assess and investigate your financial affairs if you are expecting them to pay. You can, of course, not consent to a financial assessment, but the state will likely expect the person to pay the full cost of their care home fees. If a person has capital or income above the upper capital limit (which is currently £23250 but due to rise to £100000 in October 2025), then they will be expected to pay their care home fees until their capital drops below that amount. After which, they will pay an assessed contribution until their capital drops below the lower capital limit (which is currently £14250 but due to rise to £20000 in October 2025). When considering what money and assets a person has, the local authority will take into consideration their house (or the proceeds of the sale of their house) unless their partner still lives in the house, in which case they won't. They will also take savings, investments, pensions and income into account.

Depriving Yourself of Assets

The Care Act (Annex E) says, "People should be treated with dignity and respect and be able to spend the money they have saved as they wish – it is their money after all...it is important that people pay the contribution to their care costs that they are responsible for. This is important to the overall affordability of the care and support system. A local authority should therefore ensure that people are not rewarded for trying to avoid paying their assessed contribution." There is often a temptation for people to reduce their assets to avoid paying care home fees. However, there are rules that must be followed, and a local authority will consider the following before deciding whether deprivation for the purpose of avoiding care and support charges may have occurred:

Therefore, it is important to consider the reasons why a person is disposing of their assets. If it is to avoid paying care fees, and it is reasonably expected that they needed care and support, and the person has a reasonable expectation of needing to contribute to the cost of their eligible care needs, then the local authority may conclude that a deprivation of assets has occurred. For instance, if a person already has care and support needs, and makes a substantial financial gift to their children which is out of character, this may be considered a deprivation of assets. However, if a person didn't have reason to believe that they would require care and support in the future, and made a significant gift to their children for a specific purpose (other than to avoid paying care home fees), it may not be considered a deprivation of assets. Where this has been done to remove a debt that would otherwise remain, even if that is not immediately due, this must not be considered as deprivation. Whether a deprivation of assets has occurred or not can be a difficult determination in some circumstances and may require legal advice if you aren't sure. There is a misconception that the local authority will only consider the last 7 years when assessing a person's financial circumstances for the purpose of paying care fees. This is incorrect and is connected to gifts and inheritance tax, not paying care home fees. In summary,  who is responsible for paying care home fees can be a complex determination and the local authority might conclude that it is the person who is receiving the care, even if they no longer have the money if it is determined that they deliberately deprived themselves of their assets.