Advice on funding...

This section contains information on paying for long-term care, including:

• What the state will normally provide
• What the NHS may provide
• Insurance policies to pay for care

What the state will normally provide

The state will no longer look after us ‘from cradle to grave’ and if you are thinking of going into long-term care, you will be assessed to determine what you can and can’t afford to pay for.

Essentially there are 3 bands of support depending on your assets:

• Less than £13,000 – your local authority may pay for the total cost of your care.
• £13,000 – £21,500 – your local authority may pay for a proportion of your care.
  (for every £250 you have over the lower amount, they will subtract £1 per week from the amount they contribute).
• Over £21,500 – you will have to pay the full costs of your accommodation and personal care
  (nursing care will be assessed separately).

Notes

• If your capital falls below £21,500 while you are in a care home, you will become eligible for help from your local authority.
• Your home will only be included in your capital if you live alone, or if you and your partner are both moving into a home.
• You will be expected to use all your income (pension, benefits etc) to fund your care. However you can keep £20.45 a week for spending money.

Attendance Allowance

Attendance allowance is a tax-free, non means-tested weekly benefit from the government. If you are over 65 and paying for your own care in a care home then you are likely to be eligible.

What the NHS may provide

Even if you are paying all your own fees, the NHS now makes a contribution to the cost of your nursing care. Your nursing needs will be assessed by a registered nurse prior to your admission and the level of funding depends on your needs (low, medium and high)

Low	£40 pw	people who have minimal nursing need of a registered nurse
Medium	£87 pw	people who need a registered nurse on at least a daily basis and may need access to a nurse at any time. They may have multiple care needs, but their condition is stable and predictable
High	£138 pw	people who need frequent help by a registered nurse. Their physical or mental state is unstable and/ or unpredictable

You are entitled to this contribution from the NHS regardless of whether your care is funded privately or by the local authority.

Insurance Policies to cover the cost of care (Care Fees Payment Plan)

If you have some equity you may wish to consider paying a single lump sum into a policy which will guarantee a fixed payment for as long as you need care. The cost is based on how long the insurer thinks you’ll need care for and the level of care you require. The payments are tax-tree and normally paid directly to the care home.

Example income from £40,000 lump sum:

	Per Annum	Net yield
Female 80 years	£8,500	21.25%
Female 90 years	£12,600	31.5%
Male 80 years	£11,400	28.5%
Male 90 years	£16,500	41.25%
(source –Alexander Forbes Financial Services Ltd – Annuity Bureau)

To check whether you are eligible for state funding or whether you will be self funding CareAware have a useful flowchart on their website at www.careaware.co.uk/funded_flow_chart. CareAware is a non profit making public information and advisory service specialising in the issues relating to long term care for older people. If you do not have access to the internet you can telephone CareAware for information and advice on 08705 134925.

We strongly recommend that you seek independent advice on how to fund your care, especially if you are considering options such as a Care Fees Payment Plan. For independent advisory sources click here.

Updated
21.06.07