Paying for care
How much does in home care cost?
Unfortunately, there is no simple answer to this question. The cost of home care will depend entirely on your individual circumstances and the level of care you need. It can be a complex matter and in many circumstances, people require care which they have not planned in advance and often this means they haven’t fully considered the matter of how to fund it either. As a result, many people do not get the right advice or receive the best care suited to their needs.
Read on for a straightforward guide to the costs and considerations you should make when deciding on care for yourself or someone you love.
Introduction to the cost of care
Whether you are paying for care in your own home, or paying for residential care, there are five ways to help fund the cost:
- With state help, either local authority or NHS
- With cash or investments
- With an annuity
- Using your house
- Family help
Whatever your circumstances, we recommend that you follow our basic rules of preparing for care:
- Make sure you are getting the sort of care you really want and need for now and in the future.
- Get financial advice from a SOLLA financial advisor, before you start.
- Sort out your legal position; get a power of attorney, sort out your will.
CARE FUNDING GUIDANCE
If you or a loved one is beginning to struggle with everyday tasks at home or if your health or mobility is restricting you from being able to access the local community, this is a good time to consider your care needs, both now and in the future.
Unlike the NHS, social care is not free. Most often it is means tested which means you are likely to need to pay some of it however, there are quite a few allowances that you can get, some of which are not means-tested.
Follow the Age UK benefits calculator as a starting point to find out more https://benefitscheck.ageuk.org.uk/Home/Start/
The local authority
The first thing you can do is get a referral from your GP, carer or district nurse to have a local authority care assessment to establish what level of care you need and what help is available to you.
The assessment itself is free and everybody is entitled to it, whether you are eligible for financial help or not.
The care assessment will be followed up by details of a care plan and a means test which will take into consideration your income, savings and property.
If the local authority does contribute, remember that you do not have to move out of your house. And if you, or your dependents live in your house, the value of your house is not part of the financial eligibility assessment.
If one spouse is more dependent than the other, it might pay that the dependent spouse pay for the majority of domestic and care costs – if there is the possibility of becoming eligible for local authority help.
For more information on how to arrange an assessment and advice on what questions you might be asked visit https://www.nhs.uk/conditions/social-care-and-support-guide/help-from-social-services-and-charities/getting-a-needs-assessment/
NHS Continuing Health Care
This is a complete package of care services arranged and funded by the NHS which can be provided in various settings including your own home. The service is free and is not means-tested.
Not everyone who has ongoing health needs will qualify for CHC but there are times when a person’s eligibility should be considered:
- If you have a rapidly deteriorating condition which may be terminal;
- When you are about to be discharged from hospital, particularly if you need permanent full-time care at home;
- When your personal care needs are reviewed;
- If your physical or mental health decreases rapidly and your current care package becomes inadequate.
Those who live at home and are eligible can have both their health care and their personal care, such as help with dressing and bathing, paid for in full by the NHS. This includes live-in care and Christies Care has an increasing number of clients whose care is at least partly and often fully funded by the NHS.
Cash or investments
If you are in a position to pay for care with cash or investments, this gives you a lot more freedom. However, we strongly recommend going to a SOLLA approved financial advisor early, to help you make the best decisions so that your money lasts for as long as possible.
An impaired annuity paid directly to a care provider, is not subject to tax in the hands of the client, and can pay a generous amount, depending on the health of the client. If a client has an impaired annuity and becomes eligible for NHS continuing health care (free of any means test), it is important to have terms so that the annuity can be paid to the client instead of the care provider (it will then be subject to tax but you will at least get that income).
Using your house
For many people, their house is the largest amount of capital they own. There are three main ways of using your house to pay for care:
- Sell the house, downsize and use the surplus money to pay for care.
- Retirement Interest-Only mortgage (RIO). You can get an interest-only mortgage on your house if you are 60 or over. Borrow the amount you think you might need (say six months’ worth of care fees at a time) plus a little more to cover interest. Interest rates at the moment are below 5%. At the end of your life, your family still owns the rest of the house. BUT, you do need enough of an income to cover the interest payments. That is why RIO lenders always ask for the size of your pension and usually make an offer of around 4x of your pension
- Equity release. You get a lump sum in exchange for your house.
There are two ways that family can help pay for care:
- They make a direct financial contribution. In this case, it is highly recommended to have a properly documented loan agreement, to be a debt against the estate on death, and to ensure agreement between siblings.
- Family helps from time to time with the care. If family comes and takes over, say one week in four, the total amount paid for care drops by a quarter. Of course, this doesn’t work for care homes, who will charge for even unoccupied rooms.