« Previous | Contents | Next »
Listen
Appendix 1: Self-Funding Rules
Individuals seeking local authority support for their care are required to undertake a means test. The test is based on the individual's income and capital. Single clients with capital exceeding £20,000 are expected to meet all relevant care costs - they are fully 'self-funding'. Those with capital below £12,250 will be supported at the 'standard rate' - the rate which the local authority is prepared to pay for a care home place. If the fees are greater than the standard rate, then the individual is responsible for making up the difference.
Those whose capital falls between £20,000 and £12,250 are allocated a 'tariff income' of £1 for every £250 that their capital exceeds £12,250. The capital limits may vary by local authority. These values apply to Scotland 1. Other broadly similar limits apply in other parts of the UK.
The value of the home is ignored for means test purposes if there is a spouse or partner living in the home. If the home has to be sold, local authorities generally allow twelve weeks 'disregard' of its value, giving time to sell it.
For those clients with incomes between the lower and upper capital limits, local authorities make up the shortfall between the contribution that clients are expected to make and the 'standard rate'. This contribution will include some, or all, of the clients' income. Income is defined as being 'fully taken into account', 'partly disregarded' or 'fully disregarded' for this purpose. Under the 2005 Department of Health guidelines 2, for example, state pensions are fully taken into account but winter bonuses are fully disregarded. Local authorities must ensure that, after making their contribution, clients are able to retain a Personal Expenditure Allowance ( PEA) of £19. 60 3 per week.
Thus private contributions to care home costs include:
a. Fees paid by self-funders
b. 'Tariff-income' contributions to fees made by those with intermediate levels of income
c. Any 'top-up' fees paid by individuals in excess of the 'standard rate'.
d. Any income which is not disregarded for the purpose of financial assessment. Another example is that a client with an occupational pension would be expected to contribute its value fully towards care costs but if the client had a living spouse outside the care home, fifty per cent of the occupational pension would be disregarded in the assessment.
« Previous | Contents | Next »