Quickpoints

Local Authority Funded Care

4th March 2011

Obtaining Help with Care From Local Authorities

1. Introduction

Local Authorities (also referred to as social services) can provide care for people who need help with personal or social care in their own home, for example help with dressing or washing or with meals. Local Authorities can also provide residential care in a care home.

Before the Local Authority can provide help, it has to assess a persons needs to see what help is required. This is called a Needs Care Assessment or Community Care Assessment.

Local Authorities do not have the resources to help everyone who is in need. After the Local Authority has carried out a Community Care Assessment, it will decide if the level of help required entitles that person to receive help from them. To work this out they compare the assessed needs with their eligibility criteria.

Eligibility for help is determined by looking at the risks to a person’s autonomy, health, safety, ability to manage daily routines and involvement with their family and wider community that would arise if their needs were not met, and comparing that with the Local Authority’s criteria. The Government has issued guidance to all Local Authorities which puts a person’s needs into four bands that reflect the severity of risk –

Critical Substantial Moderate and Low

The Local Authority can then choose how best to meet the need within its budget. Many Local Authorities decide that their budget will only allow them to help people whose needs fall within the critical and substantial bands.

Anyone receiving help from the Local Authority is means tested to see if they can afford to pay for some or all of their care.

If a person’s needs are primarily for health care, they may be eligible for help from the NHS. This is not means tested.

For more information on NHS Continuing Care funding, please see our separate client briefing paper on NHS Continuing Care.

2. Care at home

The Local Authority can provide services to people in their own home either through staff employed by them or through private agencies. The types of services provided include –

Provision of equipment or carrying out adaptations to a person’s home.
Providing day care services where the person can attend a day centre or other such scheme.
Providing personal care at home.
Home help and domestic assistance (including housework, cleaning shopping etc). N.B. Some Local Authorities do not provide cleaning help if this is the only requirement a person has for assistance.

3. Paying for care at home

Anyone receiving care from the Local Authority will be means tested to assess what contribution they must pay for the care provided. Each Local Authority can decide how much it will charge for the services, but the charge must be reasonable and must not reduce the person’s income below a certain level.

The Local Authority will follow the capital limits established for means testing for residential care charging. The upper limit for 2010/11 is £23,250. If the person’s capital is over this upper limit then they will have to fund the full cost of their care. The capital total will NOT include the value of the person’s home.

4. Direct payments for help at home

If help at home will be funded in whole or in part by the Local Authority, they must offer to make direct payments to the person in order that the person may arrange their care themselves.

The Local Authority’s contribution will then be paid direct to the person who can then use the funds to purchase care. The person must be able to manage the payments themselves or with assistance for example from relatives/friends or attorneys under a power of attorney.

5. Residential care in a care home

If a person is assessed as needing residential care, the Local Authority can arrange a place in a care home run by them or in a privately run care home.

If the person can afford to pay for their care home costs themselves, they can arrange their own accommodation but it is advisable for their needs to be assessed by the Local Authority first to make sure the home is suitable for their needs.

6. Paying for Residential care in a care home with help from the Local Authority

If the Local Authority arranges for a person to receive residential care in a care home, the resident will be means tested and will be expected to contribute towards the cost of the care from their income and possibly their capital.

It is only the value of the resident’s assets (including their share of any jointly owned property) that will be taken into account in the means test. There is no obligation on the resident’s spouse to pay or contribute to their care.

If the resident’s capital is over £23,250 (for 2010/11) they will have to meet the full cost of their care themselves.

If their capital is between £14,250 and £23,250 they will be expected to make a contribution from their capital until their capital reaches the £14,250 limit.

For 2010/11 a resident is allowed to retain £22.30 of their income a week, the balance of their income will go towards funding the cost of their care regardless of how much capital they have.

The Local Authority fixes a standard weekly limit for the amount it will pay for a place in a care home. This charge varies between different authorities and depends on the type of care required.

For example in 2010/11 in Banes the Local Authority will pay –

£413 a week for a place in a residential home
£452 a week for a place in a residential home which caters for older residents with mental infirmities (EMI).
£536 a week for a place in a nursing home.
£569 a week for an EMI nursing home

The means test works by assessing how much of the standard weekly rate the resident must pay from their income and capital. The Local Authority pays the balance.

7. Third party contributions

If a person is assessed as needing to enter a care home, they will still have the right to choose which home to go to. However the cost of many care homes will be greater than the Local Authority’s weekly limit.

The Local Authority must arrange for someone to enter a home of their choice as long as –

It is suitable to meet the person’s needs.
There is a vacancy at the home.
The cost is not more than the Local Authority would normally pay for someone with those needs.
The Home and the Local Authority agree to enter into a contract for the person’s place.

If the chosen home is more than the Local Authority’s usual contribution, then they will still have to arrange the place as long as someone else is able to make a third party contribution to make up the difference.

8. Treatment of your home under the means test

For many people their home is their main asset and they are concerned by reports that people are forced to sell their homes to fund their care. However, the value of their home is not always taken into account. There are certain circumstances in which any property they own will be disregarded –

For the first 12 weeks of their permanent residence in the care home.
If the resident’s spouse, civil partner or cohabitee is living in the property.
If a relative aged over 60 is living at the property,
If an incapacitated relative aged under 60 is living at the property,
If a child under 16 whom the resident is liable to maintain is living at the property,
A lone parent estranged or divorced from the resident is living at the property,
If the Local Authority exercises its discretion to ignore the value of the home which they can do where reasonable - for example they may consider disregarding the property where a close relative aged under 60 has lived with and cared for the person for many years.

When looking at the value of the resident’s capital, only the resident’s share of jointly owned assets is taken into consideration. With jointly owned property, depending on the circumstances, the market value of the share of the property could be nil if the other co-owners are unwilling or unable to purchase the resident’s share.

9. Deferred payment arrangements

After the initial 12 week period has expired, the value of the resident’s property, unless it is otherwise disregarded (see above), will be taken into consideration and the resident will be expected to pay the full cost of their care.

Subject to certain conditions, if they choose to do so, the Local Authority can, in effect, loan the resident the money which would otherwise be payable from their home. This is termed a deferred payment agreement. The “loan” is repayable when the resident dies unless the property is sold before then. While the property remains unsold the “loan” will be interest free until 56 days after residents death. It will be secured against the house with a legal charge.

10. Deliberate deprivation of assets

If a person gives away or otherwise deprives themselves of assets in order to reduce their level of capital for means testing, the Local Authority may still be able to assess them on the basis that they still owned those assets.

The timing and motive behind the gift should be taken into account.

Where the person has deliberately deprived themselves of capital they will be treated as having ‘notional capital’ equivalent to the value of the capital disposed of.

If the deprivation occurred within six months of the resident requiring funding, the Local Authority can recover any sums it contributes to the resident’s care from the person to whom the assets were transferred.

This six month period only applies to the Local Authority’s power to recover assets. There is no set time limit beyond which the Local Authority should ignore the transfer of assets.

11. Review of wills

Some couples consider changing their wills so that if one of them dies the other does not inherit their share of any assets, either by leaving assets direct to the next generation or by using trusts. This will avoid a pooling of their assets which would then be used to fund the survivor’s care.

However, even if money is used up paying for care, some people will prefer for their spouse to inherit so that they have as much money available to them as possible to pay for the care of their choice.

How Stone King can help

This briefing is an overview of this complex area. We can provide detailed advice on care funding issues. We can offer practical advice for people who are arranging care for themselves or for someone else.

We can give advice on the application of the means test and help challenge means testing decisions, for example decisions relating to the treatment of a person’s home. We can also give advice on eligibility for non-means tested funding from the NHS – see our separate guide about that.

If you would like any further information or advice then please contact Alison Allen in the Older Client Services Team on 01225 324407 or email: alisonallen@stoneking.co.uk

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