Who Pays for Care Homes?

Posted on 28th April 2021

care home costs If your loved ones are at the stage of life where they can no longer care for themselves through old age or illness, it might be time to consider a care home. This is a big decision to make but if your loved ones need round the clock care then a care home might be the best place for them. One of the biggest concerns when it comes to care homes is how the care will be paid for and where the money will come from. All of the above are significant worries and it is important you make sure you think each of them through. That is why we have put together a guide to who pays for care homes to help you make that decision.

 When is the Right Time to Consider Care?

There are a number of reasons why somebody might consider moving into care, such as medical needs or through the need of constant care. However, in most cases the person going into care will be the one to ultimately make the choice about whether they go into care or not. You will only be granted the decision of putting a relative into care if it is judged they lack the right mental capacity or if they need medical care that can’t be administered at home. If you believe your relative is in one of the above positions then it might be the right time to consider a care home.

Who Pays for Care Homes?

The cost of a care home will be determined based on the personal wealth of the person going into care. Usually the government will carry out a financial assessment to determine how much they can pay if any at all. Undertaking the financial assessment could determine how much support the government will provide for the care. You will need to apply for a Needs Assessment through your local council. Regardless of what your needs assessment returns, you can of course choose to pay into your care from your own funds. Many care homes might offer additional services or facilities that are not covered in the needs assessment. Following the needs assessment your relative will also be means tested.

What Is a Means Test and What Can I Expect?

The Means Test is a financial assessment that determines how much a person can contribute to their own care. It is carried out by the local council and they will look at three factors that will contribute towards how much you pay for care including income, savings and property. The value of your property may or may not be considered in the following cases;

  • It is always ideal for someone to remain in their own home, and if you need care support to do this, then the value of your property will not be considered in your care costs.

  • If you need to move out of your home to receive permanent care then it is likely the value of your property will be factored into care costs.

    You should make sure that you have claimed all the benefits that you are entitled to as the means test will already assume you are getting them. Benefits will not be included in your means test but all other income will so you will have to consider this.

What If I Give My Money Away Before Being Means Tested?

We would strongly advise against giving your money to relatives or transferring a property into their name as this will likely be included in the means test still. If the local council thinks you have given away capital to avoid paying for your care then they will still treat this as your own property of funds. It is referred to as deprivation of assets so it is likely you still won’t be entitled to more money from the council to cover your costs. In many situations you may have to sell your house to pay for part of your care costs. You can find out more about this here.


Before you decide that care is right for you, we strongly recommend that you go through both of the above processes in having the Needs Assessment and being Means Tested. Go through this process honestly and you can then make a decision on whether a care home is the best place for your relative or yourself.

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