Care home fees planning

Section 117 aftercare

There is a possibility that care will be free if you are detained for treatment under Section 3 of the Mental Health Act 1983 (commonly referred to as being ‘sectioned’), social services and the health authority will be required to make aftercare arrangements for that person under Section 117 of that Act. This ‘Section 117 Aftercare’ will be free until it is no longer needed. Whilst there is a possibility of free aftercare being withdrawn, many cases involve dementia and so an improvement in this condition is unlikely. If free aftercare is withdrawn, we can provide you with advice and assistance on challenging such a decision.

What is the financial assessment process?

If you do not qualify for free funding, a financial assessment will take place to determine what contribution should be made towards care home fees.

The Local Authority can only take into account the your income and capital and so cannot take into account any income or assets in the sole name of a spouse or partner. That said, the Local Authority is entitled to take into account a share of any jointly held assets. This will be deemed to be an equal share of any joint asset (such as a bank account) unless an alternative division can be proved to exist.

If you are in a care home, the first call on funds is from your income. All income is taken towards care home fees, less some limited exceptions such as the Personal Expenses Allowance (PEA) of approximately £20 per week and one half of an occupational pension, if it is paid to a spouse. If your income is not sufficient to meet the care home fees, then the Local Authority will consider your capital.

The Local Authority must contribute to care home fees if your capital is below the annually set threshold. Above it, you must pay the full fees. At present, the following figures apply:

  • Assessable assets in excess of £23,250 (the upper capital threshold): you will be fully responsible for the care home fees
  • Assessable assets between £14,250 and £23,250: you and the Local Authority will share responsibility for the care home fees
  • Assessable assets below £14,250 (the lower capital threshold): the Local Authority will pay their maximum contribution towards the care home fees. The Local Authority do not simply “pick up the bill”. This means that they will still take your income and there may still be a shortfall.

Disregarded assets

The phrase “assessable assets” has been used because certain assets are permanently disregarded, such as:

  • Personal chattels, for example a car, caravan, mobile home, jewellery or boat
  • Life policies which include investments with an element of life cover, such as Investment Bonds or With-Profit Bonds. More information is available upon request
  • A Personal Injury award for the first 52 weeks after the initial payment; or indefinitely if held in trust

Your main residence will be disregarded if:

  • You are a temporary resident in a care home
  • You are in the first 12 weeks of a permanent stay in a care home
  • A spouse/partner is living in the property
  • A family member over the age of 60 is living in the property
  • A family member under the age of 16 is living in the property
  • A family member, who is incapacitated, is living in the property. Note that ‘incapacitated’ has no strict legal definition in this context and at Buckles we can give detailed advice on this if needed

Your main residence might be disregarded if a family member aged between 16 and 60 is living in the property. In this situation the Local Authority has discretion to ignore the value of the property. This is unlikely to be mentioned and less likely to be exercised. If you or a family member is in this situation, we can provide advice based on your specific circumstances