Paying for care: A four-step plan to get funding

Written by Zenya Smith01/05/20

1. Paying for residential care 

Who is responsible for paying care home fees?

There are different options for care home funding. If your savings can cover the funding for care, then you’ll have to pay the fees yourself. However, you may be entitled to local authority, council or NHS support and funding. The two main types of NHS funding includes NHS continuing healthcare and NHS funded nursing care. 

If the total amount your Local Authority is willing to pay towards your care home doesn’t fully cover your fees, or you choose a home that is more expensive than the amount of funding you’ll receive, you will likely need to cover the difference. This is called a top-up fee. Before deciding if you will cover these top-up payments, it’s important to think carefully about whether you’d be able to afford them in the future if your situation changes, such as if you experience a change in income. It’s also important to remember that care homes can increase their fees annually, however the funding from your Local Authority is unlikely to go up, so you may find your top up fees increasing each year. 

Occasionally, charities can help with top up fees. Ask your council to connect you to independent advice if you’re worried about affording top up fees, or need additional financial support. 

You’ll still receive your income from pensions if you move into a care home. However, if any of your fees are paid by your local authority or the NHS, you may have to use your State Retirement Pension to contribute to the cost of care.

What is the 12-week disregard for care home fees? 

If you live in England, you have to fund your care costs independently if you have total assets worth more than the upper capital limit of £23,250. However, if your liquid assets are below this amount but you own a property which you intend to sell to fund your long-term care, the local authorities must disregard the value of your property for the first 12 weeks of you moving into a care home, and fund your care. When the 12 weeks are over, or your property is sold (whichever happens first), you must fully fund your own care. If your financial circumstances change unexpectedly when you’re already in a care home, the council can still apply the 12-week disregard.

When your local authority carries out your financial assessment, they will let you know if you’re eligible for the 12-week disregard.

What happens when a person in a nursing home runs out of money?

If your savings have dropped below the required costs of your care, it can be a distressing and anxious time. However, your local authority still has a duty of care to those who have been officially assessed as having care needs, including for funding care, even if you were initially able to afford the costs of your care personally. 

If you’re worried about funding your care, contact your local council or authority for a financial assessment or care needs assessment to see if you’re entitled to care funding.

2. Paying for home care 

When working out how much you’ll pay for home care, It’s important to factor in daily living costs, such as utility bills, food etc. The cost of home care will also be influenced by the type of care needed, such as domiciliary care, dementia care, respite care, palliative care, or hourly care. 

It’s important to check whether your chosen provider charges additional fees or extra costs alongside your weekly rate. These can include extra charges for nightly wake-ups if your carer lives with you, charges for sourcing a carer, surcharges over bank holidays, or a one-off fee for using an agency’s services. At Elder we never charge these fees, making our services a more affordable choice. 

Check if your provider charges a flat rate, or will offer a personalised rate for your care, based on your care needs. This will mean you’re only paying for the care you require. 

If you live in Scotland, no matter your condition, capital or income, if you need personal care, you’re entitled to an allowance for personal or nursing care.

What happens when a person receiving home care runs out of money?

If you’re worried about paying for future care, it may help to seek financial advice from an independent advisor (IFA). Unfortunately, these services aren’t usually free, although some organisations do offer the first consultation on a no-obligation basis, which can provide useful independent advice on what to do next.  

Are you in Scotland?

You may be eligible for free personal care from your local council. Click below to find out more.

4. Four-steps to paying for care

When approaching care funding for the first time, it can all feel a bit overwhelming. You may not know where’s best to start. Here’s four areas other Elder customer’s have researched in order to fund their care. 

1– Getting the benefits you’re entitled to

These are the simplest ways to claim some extra money towards your care. There is usually very little friction in terms of application, and much more people are eligible than claim. This can help you to afford the care you want. Billions of pounds go unclaimed each year – make sure you’re not missing out. Key benefit for people over 65 to look at include Attendance Allowance, Pension Credit, Carer’s Allowance, Personal Independence Payment and council tax rate relief. While they may not seem like much one their own, each benefit really adds up, and can make everyday living much more affordable. 

Read more on Elderly benefits here

2 – Checking your eligibility for NHS funding

This is a funding stream that covers all your care costs, no matter which types of care you’re interested in. It’s paid by your local NHS and is available for those who need support with long-term health needs.

NHS funding is the most difficult type of funding to get. However, should you qualify, you’re able to get your full care costs covered – so it’s worth starting with.

To do this, speak with your GP – asking for an NHS Continuing Healthcare Checklist. This is a quick screening test to see whether you’re suitable for a full assessment into your primary health needs. 

If you’re facing exceptional circumstances, for example are living with a rapidly deteriorating medical condition, this form of funding can be fast tracked. 

The checklist 

This is the first stage in the assessment process to check eligibility for a full assessment, carried out by a doctor, nurse or social worker. Around 62% people pass it.

The full assessment 

This is the main assessment. A multidisciplinary team of health and social care workers will look through 12 care ‘domains’ to assess your eligible care needs. 

The decision support tool 

The Decision Support Tool helps assessors come to consistent decisions about who is eligible for funding. You can try the tool yourself for free online beforehand.

After the assessment 

If eligible, a team will work with you to plan your care. You’ll have a big say over this. For example, you can take control of your funding with a personal health budget, or choose your own care provider.

3 – Accessing local authority care funding

Most people fund their care with support from their local authority. But this is best to check after you’ve first ruled out NHS funding, as a referral from the NHS may increase your chances of getting care funding. This starts with a care needs assessment, and then a financial assessment. In England, you’ll be entitled to some care funding if you have less than £23,250 in liquid assets. You can request whatever funding you are entitled to as a direct payment, which puts you in control of how you want to spend it.

Read more about local authority funding here. 

Understand the Care Act

The care act 2014 is the law that states how adult social care should be provided. It maps out eligibility for care and requires local authorities to provide services for people with care needs without delay that will impact their needs or make them worse.

Care needs assessment 

This social care assessment will tell you exactly what care needs you have. If you’re entitled to funding, the care needs assessment determines the size of your budget.

Financial assessment 

This means test assessment is to decide who is responsible for paying for your care – you or your local council. To be eligable for support, you’ll need to have savings below the ‘upper limit’ (currently £23,250)

Personal budget 

This is the amount of money you’ll get to pay for the cost of your care needs. The sum of your budget is based on the results of both assessments. 

Direct payments

Direct payments are a way for you to take control of your personal budget and choose for yourself how you want to spend it. 

Home adaptations

Upgrade your home to make it suitable for care. You can get up to £1,500 from your local authority, regardless of your financial situation.

4 – Funding care with savings or assets

If you’re not able to get your care fully funded by your local authority, all is not lost. You can use your liquid assets, or use any of a range of financial products to help you pay for care. There is an ever-increasing range of ways to release equity from your home. These products allow you to stay in your own home but use its value to fund your care.

Read more about funding care without support.

Using equity release to pay for care

Paying for care is a considerable long-term commitment, so if your loved one is considering long-term care in their own home, an equity release scheme could provide the necessary funds.

Read more 

Immediate needs annuity

If you’re funding your care yourself, using an immediate needs annuity for long-term care can provide a minimum income guarantee towards care costs.

Read more 

5. Care funding advice – things to remember

Paying for care can feel like a stressful and daunting process. It may feel like you’ve suddenly been launched into a world of box tickers and bureaucrats. But with the right mindset, there’s nothing stopping you from arranging the care you think is best. 


It’s simpler to navigate than you think

The system is complex – and sometimes feels like it’s against you – but we can help break things down into manageable next steps. Why not begin by gathering together any relevant information you’ll need for a funding application? We recommend things like national insurance details, bank statements, annual income from any benefits or pensions, and details of any assessable savings (including joint savings).


There are always options

There are always options available. It may not feel like it sometimes. But don’t give up. Relax, and let us help you put together a plan and look at every possible care arrangement. 


We’re always here to support you

When you feel alone – lost – in the system, we’re on your side, championing your right to funding, and giving you the confidence to make decisions. For expert money guidance and independent support, we’ll connect you to charities and advocates who can help you along the way. 



Hold your nerve

Whether you’re applying for for NHS Continuing Healthcare, or funding from your county council, you’ll be entitled to an appeal process if you don’t agree with the outcome of your assessments. If you do your research and seek expert advice, you’ll be confident to challenge any decisions you don’t feel to be correct. 



Quality care, with no unexpected extras

Elder’s pricing is tailored to the care needs of the individual – so to receive your personalised quote, give our friendly team a call.  

  • No joining fee
  • No surcharges on Bank Holidays or weekends 
  • A one week trial period, to see if care works for you and your family
  • No additional fees if you need to request a new carer 
  • No lengthy contract or exit fee – all we require is a two weeks notice

Read more guides on the cost of care

We know your money matters. Take a look at more Elder guides on care costs and funding below.