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Paying for care home fees – who pays for what?

When moving to a care home yourself, or supporting a loved-one’s move, understanding what the State will fund and who is eligible to receive funding can be extremely confusing. Coupled with the fact that this can be a time fraught with anxiety and emotion, and that the wellbeing of your loved-one is your first concern can make the topic of care home funding a minefield to navigate.

It could be that this is the first time you have ever had to consider this issue, or that the change has been very sudden and unexpected so you have not had a lot of time to make the necessary arrangements. The following provides an outline to some of the most commonly asked questions, but does not replace seeking specialist advice about your specific situation.

When and what will the Local Authority pay?

One common misconception is that National Insurance contributions go towards the cost of funding social and residential care, this is not the case. Whether you or your loved-one’s residential care will be funded by the Local Authority is means tested.

The means test looks at two specific areas to determine eligibility:

  • The resident’s regular income from pensions, benefits and earnings
  • The resident’s capital – such as cash savings, investments and any property

There is a threshold that applies to your combined income and capital. For 2020-2021 the threshold is £23,250, meaning that as a self-funder if your combined income and capital is above this figure you will have to pay in full for your care. However, if it is below this threshold the amount you will have to pay will be determined by the means test.

For more information about funding care homes in North East Lincolnshire please visit Services 4 Me.


Even if you or your loved-one is self-funding because the combined income and capital falls above the threshold, it is still important to get a care assessment as there are other forms of financial assistance that could be helpful.

Will I have to sell my home?

If you or your loved-one owns their own home, the value of it could be counted as capital after 12 weeks if the move to a care home is permanent.

However, this will not be the case in situations where other people still live there, including:

  • Your husband, wife, partner or civil partner
  • A close relative aged over 60, who is incapacitated
  • Ex-husband, ex-wife, ex-civil or ex-partner if they are a lone parent

If most of you or your loved-one’s assets are tied up in property and there are very little savings to consider, the Local Authority might offer the option of a deferred payment agreement. This means the home will not have to be sold immediately to pay for the care home fees.

To learn more about Deferred Payment Agreements visit Money Advice Service.

Your Home

  • “Everyone went above and beyond looking after my mum and I appreciate the kindness and sincerity they showed her.”

    Relative comment
  • “Stayed here for a short time whilst waiting to be transferred. The staff were amazing I couldn’t have asked for better care. Nothing was a hassle for them, I asked for something and within minutes they were here.”

    Resident comment
  • “We would not hesitate to recommend the care given to our Dad. It was often above and beyond the expectations of a care home and more like that of a nursing home. Nothing was too much trouble for the staff. They treated him with the greatest respect.”

    Relative Comment