Paying for staying in a care home

How care home charges are worked out and how your finances might be affected. 

Most people will have to pay something towards the cost of their stay, a sum that is calculated using Department of Health guidelines. Some people may fund their stay with no financial assistance from the council. 

Our guide to financial arrangements for your stay in a residential care home will give you a better understanding of the financial aspect of residential or nursing care homes. 

Who do I contact about care? 

If you have are any questions on the care aspect of being in a care home, contact your social work or care manager. 

For information about care and support issues, or to request an assessment of your support needs contact us on freephone 0800 145 6095, 8am to 6pm, Monday to Friday.

Will I have to pay? 

People with over £23,250 in capital – both savings and investment – will have to pay the full cost of the residential and nursing care home. This sum is known as the capital limit. The capital limit is decided by the government.

You are not required to pay a contribution for your care if you:

  • receive ‘intermediate’ or temporary care, including reablement (community independence) services which are short-term services usually provided for a maximum of 6 weeks. For example, to help you recover when you are being discharged from hospital
  • receive mental health ‘after care’ services (under Section 117 of the Mental Health Act 1983). These services must be provided free of charge regardless of your ability to pay for them
  • suffer from Creuzfeldt Jacob Disease (CJD).

Some people with long-term complex health needs qualify for free social care arranged and funded solely by the NHS. This is known as NHS continuing healthcare.

To decide what you can afford to pay, we will carry out a financial assessment by taking in to account your income and assets.

How much will I have to pay?

Financial assessments

To decide what you can afford to pay, we will carry out a financial assessment by taking in to account your income and assets. We will then calculate how much you can afford to pay towards your care and support costs.

Sometimes you will be required to pay the full cost and sometimes the cost will be shared between you and the council. 

If you are receiving care in a residential or nursing home, all your income and savings will be taken into account in your financial assessment. 

If you own a property and it doesn’t qualify for what we call a disregard, the value of the property will be part of your financial assessment after 12 weeks of your permanent admission in to care. You will not be required to sell your property. Instead, you can enter into a deferred payment agreement with us. 

The value of your home will not be taken into account while it remains the home of any of the following people and who will continue to live there after you have moved into a care home:

  • your partner or spouse, that is to say husband, wife, civil partner 
  • a close relative aged over 60 
  • a relative aged under 60 who is incapacitated 
  • a divorced or estranged partner - if they are a lone parent 
  • a child under 16 dependent on and who is maintained by you.

If any of the above people move into the property with the intention of gaining the disregard for you, we will include its value.

Get a financial assessment 

For a financial assessment, please contact us to request a financial assessment form for residential and nursing care. 

To request a form or if you need help in completing the form or have any other questions on funding and charges for care fees, email us at

What counts as my income?

Income that is counted towards your assessment

Your income includes any occupational or private pension and benefits you receive such as:​​​​

  • attendance allowance
  • disability living allowance (care component)
  • income support
  • pension credits
  • state retirement pension
  • occupational pension.

The attendance allowance and disability living allowance (care component), are only payable for the first 4 weeks of a permanent stay if funded by the council. You will then have to relinquish these benefits. If you are self funding you may retain these benefits.

Income not counted towards my assessment 

This includes:

  • charitable or voluntary payments 
  • civilian war injury pension 
  • service attributable disablement pensions and widows pensions 
  • war widows or widowers pension 
  • war disablement pensions and war widows and orphans pensions 
  • the mobility element of disability living allowance.

What is capital?

Capital can be:

  • bonds and premium bonds
  • cash
  • money held in banks and building societies
  • stocks and shares
  • the value of property you own by yourself and with someone else. 

If you have more than £23,250 in capital, you will be required to pay the full fee, until your capital falls below £23,250.

When your capital falls below £23,250 and your income is not sufficient to meet the home fees in full, you may be eligible for financial support from us. 

We don’t take into account the first £14,250 of your capital. That means you will always be left with at least £14,250.  

Every £250 you have between £14,250 and £23,250 is assessed as if you have an assumed (or ‘tariff’) income. For every £250 or part of £250 above £14,250, you are treated as if you have an extra £1 per week.

How do you work out what I have to pay?

Here is an example of how the charge would be assessed.

Let's say your weekly income is £207.55 made up of:

  • the state retirement pension - £155.80 
  • an occupational pension - £19 
  • guaranteed credit - £7.75
  • savings credit - £15.

And the amount of capital you have is £16,750 in savings.

We will ignore the first £14,250 of your capital, which leaves £2,500 that we assess as being an assumed ‘tariff’ income on capital. This is calculated at £1 per week for every £250 and equals £10.

This means your total chargeable income and capital is £207.55.

To work out your total weekly contributions we take away your personal allowance and disregard a portion of your savings credit.

In this example we would minus:

  • personal allowances of £28.25  
  • a savings credit disregard of £6.50.

Therefore, your total weekly contributions to the cost of your care home would be £172.80.

What happens when you do not declare your financial resources 

If you forget to mention an item on the form, or get an important figure wrong, we will review your assessment to take this into account and a backdated charge will be made. 

From 6 months prior to admission to residential care, any gift of any money or property you give to another would still be assessed in your charge, and the recipient can be liable for the charges. Also assets disposed of at less than their real value would be treated in the same way. It is illegal to transfer assets to avoid charges. 

How much money can I have left after I have paid all my charges? 

£28.25 a week. Although all of your income is required to pay for your accommodation, you are entitled to minimum income guarantee at the same rate as if they were living in your own home.

This personal allowance of £28.25 is for your own personal expenses for things that are not part of your care. It cannot be used by the home for any other purpose. The Department of Health decides the level personal needs allowance applicable in a particular year. 

In addition, your personal allowance will increase by up to £10 per week if you receive any of the following: 

  • charitable or voluntary payments 
  • civilian War Injury pension 
  • service attributable disablement pensions and widows pensions 
  • war widows or widowers pension 
  • war disablement pensions and war widows and orphans pensions.

This list is not exhaustive. Please ask if you need more information.

The first 12 weeks - time to consider

If your care is organised and paid for by us and you own your home, we will disregard the value of your property for the first 12 weeks from the start of your permanent admission into a care home. 

This, we call the ‘12 week property disregard’ and it is designed to give you time to decide what you are going to do. In this period you will have to contribute towards your care costs from income and other capital. 

You will be allowed to keep a personal needs allowance which is currently £28.25 per week. 

You will also have to continue to maintain your property and meet any ongoing costs that arise. If you have more than £23,250, excluding the value of your (former) home, you will have to pay the full cost from the date of admission. 

If you sell your home within 12 weeks of moving to a care home, the proceeds will be counted as capital from the date of the sale. 

If you are unable to pay the full cost of care, your contribution towards accommodation charges is determined by the financial assessment conducted in accordance with the National Guidelines, as explained further down. 

After the first 12 weeks property disregard

If you own or part own a property and stay in care over 12 weeks you will be assessed to pay the full cost of your care from 13th week, and this may mean selling the property to pay the charges. The exception is when the property is occupied by your partner, certain relatives aged 60 or over, or who are incapacitated.

If you are permanently in care for over 12 weeks and do not wish to sell your home, you may apply to the council to enter into an agreement to defer your charges during the agreement period. For more information see deferred payments [link to deferred payments advice above].

After the ‘12 week property disregard’, we will recalculate your charge to take the value of your home into account. You will then be charged the full cost. You will need to have decided on all your options before the disregard period has expired. You will need to take advice at the earliest opportunity to decide how you are going to pay for your care.

Third party contributions or 'top-ups'

Can I go into a home that charges more than the council will pay?

If you choose a home that charges more than the council usually expects to pay, you will have to make arrangements to pay a ‘third party top-up’. A top-up is the difference between what the council will pay and the cost of the home you choose.

A top-up fee is generally paid by a third party, not the resident. This could be a friend, a relative or a charity. The third party or representative of the service user will need to sign a written agreement with the council to keep paying the top-up fee in the long-term. The council will pay the gross cost of care to the home, including the third party top up, and bill the third party for the top up element with the assessed contribution.

However, there are conditions where the resident can pay their own top-up, also called first party top-up.

During the ‘12 week property disregard’ period, you can pay the top-up from capital (excluding the disregarded property) or income that we do not take into account in the assessment.

If you own a property that qualifies to be taken into a financial assessment you can pay a top-up from the value of your property from the date of placement. Relatives are under no obligation to do this, and it does not affect the amount the council will agree to pay a care home for your placement.

If you enter into a deferred payment agreement you can add the top-up to your deferred payment. If you add the top-up to your deferred payment, this will be repaid to us upon the eventual sale of the property. Before agreeing to this, the council must be satisfied that you are able to afford a more expensive home for the duration of the deferred payment agreement.

The finance team will conduct a sustainability test and advise the budget holder or the service manager.


Making your own arrangements for moving to a care home

You may prefer to make your own arrangements for moving to a care home, particularly if you already know that your financial circumstances mean that you will not be eligible for any financial support from the council.

If you are planning to pay the full cost of your care home fees, you will be classed as a self-funder.

The advantage of this is that you have more choice and flexibility and can decide for yourself which care home you would like to move into.

If you make arrangements for your own care, you will usually have to pay the full costs. These costs are likely to be higher than for care arrangements made by the council, as councils can usually negotiate to pay lower rates to care providers.

If you will not be receiving support from your local council towards the costs of your care home then check if you would be entitled to continue to claim Attendance Allowance or the care element of Disability Living Allowance as this can be used towards the costs of the care.

What do I do if I am self-funding but running out of money?

You will pay the full cost for residential or nursing home care if your savings and capital are more than £23,250. Once your capital falls below this figure, you may become eligible for financial assistance. It is important to note that the council will not pay more than it would usually expect to pay for the level of care you need. If the home is too expensive you may have to top-up the difference between what the council usually expects to pay and the actual cost. You can top-up from the value of your property which can be deferred.

Alternatively, you may have to move to a cheaper home.

If you believe your capital is likely to fall below £23,250, you should contact us to arrange a full financial reassessment.

NHS-funded nursing care

What is NHS-funded nursing care?

The NHS is responsible for all registered nurse costs and continence supplies in nursing homes.

If you are in a nursing home you are entitled to get the the nursing element of your care fee for free. This is regardless of whether you are paying the full cost of you care or get help from the council.

Nursing care is care provided by a registered nurse and is different to personal care. The NHS will pay the assessed amount direct to the home or the council.

If your overall care needs are mainly health related, you may be able to get all your care costs paid in full by the NHS. This is known as NHS-funded nursing care.

The district nurse assesses your nursing and other health needs to determine the level of nursing support to be provided. This is known as The Registered Nurse Care Contribution (RNCC). 

There are two rates of RNCC payable towards the cost of your care - the standard rate and the higher rate.

The standard rate is £219.71 per week and the higher rate is £302.25 per week.

Who can get NHS-funded nursing care?

You can receive NHS-funded nursing care if you meet the follow 2 criteria: 

  • you live in a care home registered to provide nursing care
  • you don’t qualify for NHS continuing healthcare but have been assessed as needing care from a registered nurse.

Further information

Independent information and advice about paying for care

Age UK

Age UK has factsheets and information on meeting the costs of a care home, and what to expect when you move there. The financial information in these factsheets applies regardless of your age.

Citizens Advice Bureau (CAB)

CAB helps people resolve their legal, money and other problems by providing free, independent and confidential advice, and by influencing policymakers.

Care Quality Commission (CQC)

The CQC publishes free independent reports on the quality of your local homes and care services to help you make an informed choice.

GOV.UK factsheets

The government has produced a series of factsheets that explain the aims of the Care Act and how the changes may affect you.

The Independent Age

Advice guides and factsheets about paying for care

The Money Advice Service

The Money Advice Service offers advice on all aspects of paying for care and support.

The Society of Later Life Advisers (SOLLA)

SOLLA provide a database of financial advisors who specialise in giving advice on finances in later life, enabling you to plan ahead or to make the most of your money once you reach retirement and older age. All advisors on the database have to prove that they meet appropriate criteria and have the right qualifications before they are accredited by SOLLA.

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