When does the council pay for Care Home Fees?

If a person cannot afford their care requirements, local authorities (LA) are required by law to arrange and fund the care. It is usually assumed that a person has sufficient funds to pay for their own care if their combined capital is above £23,250.

To establish if somebody is liable to pay for their own care, the individual has to submit to a financial assessment. This is a detailed analysis of their personal wealth, including both their Income and Capital.

If an individual is deemed to be entitled to receive support to pay for their care (due to their capital being below £23,250) then the LA do not necessarily pay the full amount. Instead, they pay the difference between the weekly fee and the resident’s weekly income. What this means in practice is demonstrated below.

If an individual has earnings of:

  • State pension – £115
  • Investment Income – £85
  • Private Pension – £223.50

This gives a total of £423.50 of income per week.

For the purposes of this exercise, we shall assume that the weekly fee is £700, which will also be the maximum that the LA will pay.

The individual is then required to ‘contribute’ or pay towards the cost of their care, meaning this income will be used towards paying for the care fees, and the local authority will pay the difference.

Before the contribution can be worked out, we also need to consider the individual’s Personal Expense Allowance (PEA): the part of their income that they are allowed to keep. This is explained in more detail in this paper. The PEA is £23.50, so you deduct that from the available income:

  • Available income = £423.50 – £23.50 = £400
  • Total fees £700
  • LA contribution £300 – (£700 – £400)
  • Resident’s personal contribution £400
  • Total paid to care home £700

For more information or if you wish to discuss care for your loved one please email care@greensleeves.org.uk