Care fee advice
When a person is identified as needing domiciliary or residential care and the needs assessment has been completed, discussion will turn to charging. An individual’s financial circumstances will determine whether they fully fund the cost of their care, whether they make a contribution or whether the local authority will fund the cost of their care.
If an individual has capital assets including National Savings, stocks, shares and cash in excess of £23,250 they will be expected to fully fund the cost of their care. Their home will also be considered in the calculation. Special rules govern the treatment of an individual’s property for care charging purposes which may mean that the value will be fully included in the calculation, exempted for a period of time or fully excluded.
When an individual’s capital assets drop to below £23,250 the local authority will be required to make a contribution to the charges made. For every £250 of capital over £14,250 the local authority will make a notional charge of £1 towards care charges. They will then calculate the income received from state and private pensions, annuities and other income sources to calculate the individual’s income contribution. They must allow a weekly amount of £23.50 for the individual to spend as they wish. The local authority will then calculate the difference between the home room rate or the cost of domiciliary care before determining their contribution.
It is not always the case that the local authority contribution will fully meet the cost of the domiciliary care or the home charges. In these circumstances it may be necessary to consider alternative methods to fund the difference.
When an individual’s capital savings are £14,250 or less no capital contribution will be made by them. The local authority will calculate the individual’s contribution from income sources and will calculate their contribution. Again, this could lead to a shortfall for care charging purposes.
It is important when looking at the payment of care charges that an individual is in receipt of all benefits they are entitled to. Whilst they are full funding they are still entitled to benefits. This will change however when the local authority becomes involved.
Care fee charging is a minefield and it is important to ensure that calculations are completed correctly and the correct assets, exemptions and reliefs are used to calculate contributions.