Paying for residential and nursing home care

Allowances, Income and Capital

Allowances

We will take a personal expenses allowance of £28.25 a week from your total income, along with an extra allowance of up to £5.75 depending on your circumstances.

This is called the Savings Disregard and is only applied if:

  • You are over 60 years old and
  • Have qualifying income.

Qualifying income includes but is not limited to:

  • Occupational/private pensions
  • Retirement Pension but excludes Pension Credit.

If during the first few weeks of your permanent stay in the care home you have any continuing unavoidable expenses you have relating to your home that are not covered by any state benefits, we may be able to increase your personal allowance to cover them.

If you own a property and enter into a deferred payment agreement we can also consider making an allowance for any on-going unavoidable expenses you incur in relation to your home such as:

  • Mortgage payments
  • Buildings insurances if they are not covered by your state benefits.

You can also choose to keep up to £144.00 per week to help pay towards these costs, although you do not have to. Your options will be discussed with you during your meeting with the Financial Assessment & Charging Team.

You may be asked to provide evidence of these expenses as part of your financial assessment.

Income

Some types of income are fully or partially ignored in the financial assessment. The most common fully disregarded incomes are:

  • Disability Living Allowance Mobility Component - Disability Living Allowance Personal Independence Payment - Mobility Component.
  • War Widows Special Payments
  • Christmas Bonuses
  • Income from savings which is treated as capital not as income
  • £10 a week of War Widows, War Widower’s and War Disablement Pensions.

The following are examples of income which we include (this is not the full list):  

  • All state benefits (except for Disability Living Allowance – mobility component)
  • Occupational or private pensions
  • Trust incomes
  • Annuities (a fixed sum paid every year)
  • Any other income (except for interest on bank and building society accounts, and income from investments, which will be treated as capital).

You will be asked to provide evidence of how much you receive.

Capital

Capital will include any savings you have in your name or held by someone on your behalf.

  • Bank or building society accounts;
  • National Savings bank accounts;
  • PEP, ISA or TESSA accounts;
  • Save-as-you-earn (SAYE) schemes;
  • Cash;
  • Premium Bonds or National Savings Certificates;
  • Stocks, shares, trust funds and investments;
  • Property, building and land (any rent received from property or land is treated as income).

Some capital is disregarded or ignored. Some of the more common examples are shown below but if you require any further information, please talk to your care manager.

  • The surrender value of life insurance policies or annuities and the value of funds held in trust or administered by a court which come from a payment for personal injury, including compensation for vaccine damage and criminal injuries and personal possessions (as long as they were not bought with the intention of avoiding a charge for your Care Home).
  • The value of certain types of investment bond with a life assurance element is disregarded. If you hold an investment bond but are unsure whether it has a life assurance element, ask the company that issued the bond or your financial advisor.
  • The treatment of money held in trust depends upon what rights you have to demand that the trust money be paid to you. This will be either discretionary or absolute and you will need to seek advice from the trust provider to establish the type of access you have.
  • The £10,000 compensation payment made to Far East Prisoners of War on or after February 2001 is also disregarded completely.

If you have capital of more than £23,250, you will have to pay the full cost of the care home. If your capital is below £14,250, we will ignore it when working out how much you will have to contribute.

If you have capital between £14,250 and £23,250 , £1 a week for every £250 or part of will be assumed and taken into account as income.

This is called the tariff income charge. As your capital reduces you will need to contact us to arrange a re-calculation of your contribution and provide evidence of the new balance.

To find out how much of your savings will be treated as income, use the Capital Tariff Income Table.

Example

Mr Smith has £15,905 in capital. The tariff income on the capital will be £7 a week.

£15,905 - £14,250 = £1,655

£1,655 divided by £250 = £7 (rounded up to the nearest £1).

In certain circumstances, we will take account of the value of your property 12 weeks after you go into the care home permanently.