Many people are concerned that if they move to a residential care home, their children will lose most of their inheritance.
If you need help with daily living tasks, your Local Authority has a duty to work out what your care needs are and to provide appropriate assistance. They may arrange for carers to visit you in your home, or they may move you to a residential home with 24 hour support.
The Local Authority will also investigate your savings and income to check whether you should make a contribution to the cost of the care. This is a means testing process known as financial assessment.
The Government has recently changed the rules about how much we have to contribute towards our care but the changes are not due to come into force until October 2025.
The Local Authority is responsible to pay for social care. This is support with daily living tasks such as mobility, washing, dressing, preparing meals etc.
If you need mostly medical care, you may be entitled to NHS funding which is not means tested and is therefore free for everyone.
If you need nursing care, the NHS will pay a contribution towards your care costs.
If you are receiving Local Authority care, the rules are:
The Government proposes to change the capital limit to £100,000. They have also introduced a cap so that no one has to pay more than £86,000 in care home fees during their lifetime. This was first introduced in 2014 but has still not been implemented.
Many people are very concerned that they will be forced to sell their home to pay for care home fees. However, your property is not always taken into account on means testing.
If you own a property and have a spouse or partner living at the property with you, then the property is disregarded and does not have to be sold.
If you own your own property and your carers visit you in the home, the value of your property is not taken into account on means testing.
Mrs A lives on her own. She owns a house worth £200,000 and has savings of £50,000. She has dementia and cannot live independently. She moves to a care home. The Local Authority carry out a financial assessment to see if she should pay the care home fees.
Mrs A’s property is taken into account as it is now empty. Therefore Mrs A has total assets worth £250,000.
Under the current rules, Mrs A has to pay her care home fees until she only has £23,250 left. Therefore she could pay up to £226,750 in fees if she lives in the care home for many years.
New rules, not yet implemented
Under the new rules (from October 2025), Mrs A has to pay her care home fees until she has £100,000 left. Therefore she could pay up to £150,000 in care home fees but the cap should reduce this figure further.
The lifetime cap on total care fees is £86,000 but this cap only applies to the cost of care and not to Mrs A’s general living costs. Living costs are set at £200 per week. This means that if the care home fees are £36,000 per year, only £26,000 counts as the cost of care for the purposes of the cap of £86,000. The balance of £10,000 is assumed to cover the costs of accommodation, food and household bills which you would have had to pay in any event.
The cap is likely to reduce the amount that Mrs A will spend on care home fees to about £120,000 once living costs are taken into account.
Therefore, under the new rules, Mrs A would be left with assets of about £130,000 at her death. Under the old rules, she would only have £23,250. However, the Government has postponed the implementation of the new rules several times, so it is not certain that they will come into effect in October 2025.