Post No61...How does Social Services funding work in care homes?

In some European countries, each person funds their care placement through the tax system; essentially, when they require a care home, they move straight in because the placement has already been paid for during their working life. Unfortunately, in the UK, things are slightly more complicated than that….

This post is going to discuss how Social Services (Local Authorities, or LA’s) fund a placement in a care home. It will break down the different contributions, how they work, and who is responsible for paying them. But first, let us start with when the LA will fund a person’s care fees.

When does the LA begin paying care home fees?

In the UK there is a threshold that has to be reached before the LA will begin funding a persons care, and when reached, it triggers a set of assessments that the LA's then complete. The threshold is currently £23,250.

Although this figure represents the amount a person can reach to qualify for a LA financial assessment, only £14,250 is protected. Essentially, the assessments are triggered at £23,250, but the person must still pay the care fees until they deplete their monies to £14,250.

Who pays the care fees at this point?

The way the contributions work when a person is part funded by an LA often confuses families, and when running the figures families often mis-interpret the process and believe they have more money in the pot than they do. To explain that further, I have broken down the contributors below:

·        The Resident, known as The Client Contribution - when funded by an LA, the resident will contribute their income, mostly from pensions but inclusive also of Attendance Allowance (if being claimed).

·        Social Services (LA) – the LA will complete their assessments and then agree how much they will contribute.

·        A Third-Party Top Up – this is required if the combination of the resident’s client contribution, and the LA’s contribution, falls short of the care homes fees. The third-party top up pays the difference between these two figures.

Where does the confusion come in?

The easiest wat to explain is to run an example. Let us say Mr X is assessed by the LA who advise the family to look for care homes that charge up to £1200 per week, but the family want a home that charges £1400 due to location / preference etc. Many families will think ‘OK, the LA are paying £1200, we then add Mr X’s pension into the pot and that tops it up to £1400, so we can proceed’.

Sadly, when the LA quote the £1200 they are including Mr X’s client contribution into that figure, meaning, in this example, Mr X’s pension income has already been allocated and cannot subsequently top up to the desired £1400. The best way to look at this is the £1200 is made up of the first two bullet points above, and not the LAs alone.

Many LA’s do not explain this to families, meaning the calculations often end up over inflated. As a result of this, families may waste time researching / choosing a care home that later transpires to be outside of the LA’s affordability, which can be very upsetting and frustrating.

So, what does that mean?

Because the resident’s client contribution and the LA’s contributions are combined, if a care home is charging more than the combined total it may require an additional contribution from a third party.

This can be quite problematic, mostly due to the high cost this will burden the third party with, and the bigger the gap, the bigger the top up will be.

 The cost-of-living crisis has, of late, made this process even more challenging for many care homes and LA’s. This is because the cost of care provision has increased, meaning many LAs cannot always afford to pay the care homes fees, and because the residents client contribution monies are already accounted for, it may mean more reliance on a third party top up than in recent times gone by.

If I have a good pension, can I get a better rate from the LA?

My understanding is that, no matter the value of a person’s pension, the LA will offer a rate solely based on their assessments. To go back to the example above, if Mr X has a large pension and Mr Y has a small pension, they will both be offered the £1200 even though one contributes more.

The essentially means the LA contribute less for Mr X than they would do for Mr Y

How do I pay the LA The Client Contribution?

When funding a resident in a care home, most LA’s will pay the care home fees in full directly to the care home. They will then charge the client contribution separately by invoicing the resident or the next of kin, and this payment is then made directly to the LA.

Conclusion

The most important point, when summarising this topic, is to re-iterate that The Client Contribution and the LA’s contributions are often combined. This piece of information is often overlooked when families are speaking with LAs, but it is so important to understand the overall amount available, and thus the options, when choosing a care placement.

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