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Care Home Fees
The majority of people will be expected to contribute towards their care home fees from their income and capital. If permanent residential care is arranged by the local authority, the care home fees you would be expected to pay will be calculated by a means test, which is based on nationally set guidelines.
The local authority carries out the means test and assesses your care needs. Your income and assets, including your property, will be taken into account when deciding your care home fees. During the financial year 2013/2014, if you have assets of more than £23,250, you will need to pay the full costs of your care. If your assets are below £14,250, they are disregarded in the means test. You will be entitled to some financial assistance from the local authority according to a sliding scale if you have assets between £14,250 and £23,250.
Any interest in your home will be disregarded if it is occupied by your partner or a relative who is 60 years old or over, or a younger relative who is incapacitated, or a former partner who is divorced or estranged from you but who is a lone parent, or a child under 18 years of age who you are legally responsible for?
The local authority must disregard property for the first twelve weeks of someone becoming a permanent resident in a care home funded by the local authority.
As part of the means test, the local authority has a responsibility to consider the timing and motivation for the disposal of assets. The local authority has the power to recover any sums it has to pay towards care costs from the person who the asset was transferred to, if the deliberate deprivation of assets occurred within 6 months of the resident approaching the local authority for financial assistance. However, there is no set time limit beyond which the local authority has to ignore the transfers of assets. Therefore, if the transfer of assets took place more than 6 months before the application for funding, the local authority could still treat it as a deliberate deprivation of assets and so refuse to provide funding or treat the funding as a debt owed to them.
The Government set up the Dilnot Commission which recommended an increase in the means test threshold. In April 2016, the means test threshold will increase from £23,250 to £118,500 and lifetime care costs will be capped at £72,000. The lower limit of £14,250 will be retained.
This is only a brief summary of the regulations, which are set out in detail in the Charging for Residential Accommodation Guide (CRAG) 2013. CRAG must be followed by local authorities when administering the national charging scheme because it is based on the National Assistance Act 1948, which sets out the statutory framework for charging for residential care.