Care Fees - What Happens When the Money Runs Out?

For many people who are paying for theirs or a loved ones care privately, a daunting and pending question is often lurking in the back of their minds "What happens when the money runs out?".

When an individual using a care home or home care service privately crosses the funding threshold of £23,250, their Local Authority is required to step in and provide financial support.

The Local Authority will undertake a care needs assessment to establish the support requirement of the individual followed by a financial assessment to establish the value of any assets, income or investments that they have open to them. The Local Authority will then decide whether you are eligible for funding or whether you will still be required to pay some of your care fees yourself.

**Please note that from October 2023, the funding thresholds will be changing so that anyone with assets between £20,000 - £100,000 will be eligible for part council funding and anyone with assets above £100,000 will not be eligible for funding until they have contributed £86,000 towards their care**

Will we have to change care provider?

Moving to a new care provider, whether that be home care or care home can be deeply distressing but in most cases, there are ways to ensure that you stay where you are, receiving care from your current provider. However, checking your contract with your current care provider is always a good starting point.

Many care providers are very understanding and will allow your loved one to continue receiving their care whilst you apply for funding. In some cases, care providers may be amenable to lowering the Local Authority rate so that you can continue to receive care from the service.

The amount of funding Local Authorities can give is a lot lower than it used to be which means that in many cases, a 'top-up' fee will be required. A top-up fee is an amount of money required to meet the fee of the care home after the Local Authorities contribution. You may need to ask for financial help from friends & family or a charity as if you qualify for Local Authority funding you are unable to do this yourself. Should this not be an option, you may be in a position where you are required to downgrade to a cheaper room if available, or to move to a different care home/receive home care services from another provider who accepts Local Authority rates as full payment.

What if I own a family home?

You may be wondering what will happen to your beloved home when you get to the point of requiring care assistance at home. One option available to you could be moving into a smaller home which could make capital available for care fees. Furthermore, moving house, although stressful, opens up opportunities for you to lead an improved quality of life (should the place be better suited to your needs!).

If you are not keen or feel unable to go through the ordeal of moving house there are other options available to you such as an equity release, or a deferred payment which is where your Local Authority can offer the option of delayed payments which they will reclaim what you owe when you do sell your house or estate after your passing.

In the case that you own an empty property, there are a couple of other options available to you. For instance, you could get a 12-week property disregard if you are living in a care home permanently. Being eligible for the property disregard means that the council should not include your the value of your property in your financial assessment for 12 weeks. For these 12 weeks, the council will contribute to your care fees for the duration or until your property is sold. Alternatively, you could opt to rent out your property along with the deferred payment scheme. The rental income could lower the amount of capital you have to borrow from the Local Authority.

Where can I get financial advice?

Sometimes, it's helpful to speak with an expert to gain clarity about certain matters, particularly when finance is involved. The following services are available to provide unbiased help & advice tailored to your situation:

• PayingForCare - free information service
• Society of Later Life Advisers (SOLLA)
• Independent Age
• Age UK
• Money Advice Expert

If you are looking for care services who accept Local Authority rates, TrustedCare can help! Our Care Advisers can shortlist care services for you, and even contact them on your behalf should you wish them to.