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Ways to pay for care for your loved one

If your loved one needs to go into care, you may be understandably worried about how you are going to afford to pay for it. Most people are expected to pay at least something towards the cost of their care, although the situation will be different depending on what your loved one has saved over the years. Here’s what you need to know.

Deciding if they are eligible for funding

To decide how much you or your loved one are going to need to contribute to their care, there is a process to go through with your local authority. This process involves four main steps:

  1. Care needs assessment: Here, your local authority will assess your loved one’s state of health and the sort of care they need
  2. Care plan: Based on the care assessment, they will then make recommendations about the person’s needs and whether they need residential care
  3. Personal budget: They figure out a budget to help your loved one get the care they need
  4. Means test: The local authority looks at your loved one’s financial situation to decide how much they should pay towards their care

If the needs assessment and plan pointed to permanent residential care as being the best option for your loved one, the means test will decide whether the council is going to pay anything towards this care. In general, if your loved one has more than £23,250 in capital (that’s savings, shares and property) they will have to pay for everything themselves.

If they have between £14,250 and £23,250 in capital, they will need to pay something towards their care, as determined by the local authority. Under £14,250 is ignored for this means test. Income is also included in the calculations, which can encompass pension income as well as welfare benefits. Usually the amount your loved one needs to pay should leave them with a minimum of £24.90 per week, known as their Personal Expenses Allowance.

There is also the choice to choose a privately run care home, in which case funding options vary and should be discussed directly with the care provider and an independent financial advisor.

Self-funding long-term care

  • If your loved one doesn’t qualify for long term care funding, they will need to work out a plan to help them pay for their care going forward. To help them with this you should:
  • Check they are receiving all the benefits and funding they could be entitled to, which may have changed since their care assessment
  • Look at downsizing or selling their home – your local authority may cover care costs for up to 12 weeks until the house is sold
  • Consider equity release to obtain an income for care from the house

They could also consider buying into an immediate needs care payment plan, which like an annuity provides an income for life which can be used to pay for care. It’s a good idea to get a specialist financial adviser involved at this stage, as the different options can be confusing to negotiate.

Here at Westgate, we develop a unique care plan based on your loved one’s individual needs, and can work with you to develop a plan and room options that suit not only their needs, but your budget too. Talk to us for more advice on paying your fees and the options available to you.

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