Home Care Funding Options

11 January, 2024

Posted in: Blogs

As the post-Christmas dust settles and we enter a new year we thought it would be useful to summarise the funding options available to fund your care at home.


January is a tight month for most of us, but that doesn’t mean you or your loved should not get the full care you deserve. Our guide summarises the financial help you may be entitled to.


Local Authorities:

Your local council may contribute to the cost of care.


A needs assessment is carried out to determine the type of care you require.


The council do a financial assessment, also known as a means test, to understand what level of help you may need/be entitled to.  How much you will contribute yourself depends on your salary and savings – the more money you have, the more you will be required to contribute.


A Financial Assessment Officer will visit your home and look at earnings, pensions, benefits, and savings, but won’t need to know how much your possessions are worth, or the value of any life insurance policies.


As you are not going into a care or nursing home, the means test also won’t consider the value of your property.


If your capital is over £23,250, you will have to pay for the home care service in full.


If you have between £14,250 and £23,250, the council will contribute some of the money required.


If you have less than £14,250, your capital won’t be included in the test and the council will pay for your care but will take your eligible income into account.


Remember with care at home financial assessments your property or possessions will not form part of this.


If the means assessment determines that you’ll be required to cover the cost of care yourself, the council is required to provide information on how to get help in your area.


If you paid your home care fees yourself to start with but you realise you are running out of money, the council might help with funding. When you get close to the £23,250 threshold, contact your local council to request an assessment as soon as possible.


Direct payments

If you receive care services, your local authority will offer you the option of direct payments.


Direct payments are paid straight into your chosen bank account and allow you to manage your care services (or other services you require to meet your assessed needs) yourself, rather than the local authority or trust doing this for you.


Direct payments are offered to:


  • Disabled people aged 16 or over (with short or long-term needs).
  • Disabled parents for children’s services.
  • Carers aged 16 or over (including people with parental responsibility for a disabled child).
  • Elderly people who need community care services.


To be eligible for direct payments you’ll need to:


  • Be assessed as needing care services or other social care.
  • Be able to give your consent to the payments.
  • Be able to manage these payments effectively (this can include receiving help from a family member or friend).


Your local authority will decide how much you get, determined by your needs assessment. You can use this money to pay for whatever health service or equipment you need, for example, employing a care worker, but it can’t be used to pay for everyday costs, such as utility bills or food.


If your situation changes, whether it is a long-term or short-term change, contact your local trust as that could mean your payments needs readjustment.


There are certain circumstances where local councils won’t offer direct payments. This will be explained by your local authority if relevant to you.


Direct payments do not affect any other benefits you receive.


What benefits can I claim when I need home care?

Always check if you are entitled to any benefits and if you are, make sure to claim them. Even if you have a substantial amount of savings, you could be entitled to benefits as some are not means-tested.


The figures below are for the 2023/24 tax year.


Attendance Allowance

To be entitled to claim Attendance Allowance, you must have reached State Pension Age (over 65 depending on date of birth) and:


Have a physical and/or mental disability, including learning difficulties.


Require someone to care for you or have someone to supervise you because of your disability.


Have needed that care for at least six months unless you are terminally ill.

All people in the UK are entitled to this benefit.


There are two rates available, determined by the level of support you require. However, it does not cover mobility needs. You may need to be assessed by a healthcare professional if it is unclear how your condition affects you.


If you need frequent help or constant care either during the day or at night, you could receive £68.10 per week.


If you need help both day and night, or if you suffer from a terminal illness, you could receive £101.75 per week.


If you suffer from a terminal illness and your remaining life expectancy is six months or less, there is no qualifying period and if you are eligible, you are entitled to the higher rate.


Attendance Allowance does not consider your earnings or savings and you are not required to have someone helping you in order to claim.


If you receive Attendance Allowance, you could be eligible for other benefits, or a higher rate of benefits, including Pension Credit, Housing Benefit and Council Tax Reduction.


Personal Independence Payment (PIP)

People under state pension age who require long-term care at home due to a disability or illness can claim Personal Independence Payment. The amount you receive is determined by how your condition affects you, not what it is.


To be eligible, you must have had trouble with everyday living (such as eating and communicating) and/or getting around for three months and you expect the difficulties to persist for at least nine more months.


PIP is a tax-free, non-means-tested benefit you can receive whether you are working or not.


Further, it is mandatory that you have lived in England, Scotland or Wales for at least two of the last three years and you need to be in one of these countries when you apply. If you live in another EU or EEA country or Switzerland, you can only get help with daily living needs.


If you are not a British citizen, you must generally live in or prove you intend to settle in the UK, Ireland, the Isle of Man, or the Channel Islands and not be subject to immigration control unless you are sponsored.


How much you get is decided by an assessment, conducted by an independent health professional, and the rate is frequently reviewed to ensure you receive sufficient support.


There are two components to PIP – daily living and mobility – and you could get both, but it depends on how badly affected you are by your condition.


The two parts have different rates:


The weekly daily living rate is either £68.10 or £101.75


The weekly mobility rate is either £26.90 or £71


If you are terminally ill and not expected to live for more than six months, you will receive the higher daily living rate, but the mobility rate is determined by your needs.


Constant Attendance Allowance (CAA)

Constant Attendance Allowance is available for people who are ill or disabled as a result of an injury and require constant care. You must receive either Industrial Injuries Disablement Benefit (IIDB) or a War Disablement Pension to claim CAA.


Your entitlement to CAA will be automatically considered at the time of your IIDB medical assessment.


You are unable to get CAA if you already get Attendance Allowance and it may affect your claim to other means-tested benefits.


You can apply for CAA if:


  • you claim IIDB and you have been deemed 100 per cent disabled (based on a medical assessment) and need constant, daily care. –
  • you claim a War Disablement Pension of 80 per cent or more and need personal care for the same reasons that you get the pension.


Depending on your disability and how much it affects you, there are four different allowance rates available in 2023/24:


  • Part day – £41.55
  • Full day – £83.10
  • Intermediate – £124.65
  • Exceptional – £166.20


Carer’s Allowance (CA)

If you care for someone at least 35 hours per week you could be entitled to £76.75 a week in Carer’s Allowance, paid weekly or every four weeks. If you are under pension age, you get National Insurance credits each week towards your pension as well.


To be eligible you must meet the following conditions:


  • Spend at least 35 hours a week caring for someone (you do not need to live with them or be related)
  • The person you care for receives a qualifying disability benefit
  • Be at least 16 years old
  • Not earn more than £139 per week after tax, national insurance and expenses

Have been in England, Scotland, Wales or Northern Ireland for a minimum of two of the last three years

  • Normally live in England, Scotland, Wales or Northern Ireland, or live overseas as a member of the armed forces, or living in or moving to another EEA country or Switzerland
  • Not be in full-time education or studying 21 hours per week or more
  • Not be subject to immigration control
  • You do not need to live with or be related to the person you care for, but they must already receive one of the following disability benefits:


If you receive State Pension you won’t be paid Carer’s Allowance but if otherwise eligible, you could be awarded extra Pension Credit or Housing Benefit instead.


Pension Credit for the 2023/24 tax year

Pension Credit is a means-tested, two-part benefit for people with a lower income who have reached State Pension age.


The two parts are Guarantee Credit (up to £306.85 a week) and Savings Credit (up to £17.84 per week). You can get Pension Credit if you have savings and whether you are working or have retired.


You can apply up to four months before you wish to start claiming.


Pension Credit can be claimed by single pensioners and couples (living with a partner) who live in England, Scotland, Wales or Northern Ireland.


If in a couple, you can only start receiving Pension Credit if both of you have reached State Pension age or one of you is receiving Housing Benefit for those over State Pension age.


If you are single and receive Pension Credit but you start living with someone below the State Pension age, they must reach the State Pension age before you can get it again.


How much Pension Credit could you get?

Pension Credit takes your income into account, including:


  • State pension and other pensions
  • Earnings
  • Most benefits, excluding Attendance Allowance, Christmas Bonus, Disability Living Allowance, Personal Independence Payment, Housing Benefit and Council Tax Reduction
  • Savings and investments over £10,000


You can have up to £10,000 in savings and investments (excluding your home) before it has any effect on how much you get. Every £500 over the £10,000 savings and investment threshold adds an extra £1 to your weekly income.


If you are single, Guarantee Credit will bring your weekly income to £201.05.


For couples, Guarantee Credit will take the joint weekly income to £306.85.


Savings Credit provides an income boost to people with some retirement savings. Savings

Credit can only be claimed by people who reached State Pension age before April 6th, 2016 (65 years for men, 63 for women – 2016 State Pension ages).


Savings Credit can give single pensioners up to £15.94 extra per week and couples up to £17.84.


To qualify for Savings Credit in 2023/24, your weekly income needs to be at least £174.49 if you are single and a combined £277.12 if you are in a couple.


Every £1 over these thresholds adds 60p of Savings Credit up to the £15.94 and £17.84 maximum weekly amounts.


Disability premiums

A disability premium is extra cash added to other benefits, such as the Housing Benefit. There are three kinds of disability premiums and you can get more than at the same time.


The three types of disability premiums are:


  • Disability premium
  • Enhanced disability premium
  • Severe disability premium


What is disability premium and how much can you get?

Claiming disability premium will get you £39.85 a week if you are single and £56.80 for couples.


To qualify for disability premium, you or your partner must be under State Pension age and either be registered blind or receiving any of below benefits:


  • Personal Independence Payment (PIP)
  • Armed Forces Independence Payment (AFIP)
  • Disability Living Allowance (DLA)
  • Attendance Allowance
  • Constant Attendance Allowance
  • Severe Disablement Allowance
  • Incapacity Benefit
  • War Pensioners Mobility Supplement
  • Working Tax Credit (with disability element)


What is severe disability premium and how much can you get?

If you are eligible for severe disability premium you will get £76.40 if you are a single person and £152.80 if you are in a couple and both of you are eligible.


To be able to claim severe disability premium, you must receive the disability premium or an Employment and Support Allowance related to income as well as one of these benefits:


  • Daily living component of Personal Independence Payment (PIP)
  • Armed Forces Independence Payment (AFIP)
  • Middle or highest rate of the Disability Living Allowance care component
  • Attendance Allowance or Constance Allowance funded with Industrial Injuries Disablement Benefit or War Pension


In general, you won’t be eligible if you live with someone over the age of 18 except if they receive a qualifying benefit, are registered blind, pay your landlord separately or if they are a boarder or subtenant.


Additionally, you are unable to claim severe disability premium if someone caring for you receives Carer’s Allowance or Universal Credit (carers element).


If you are in a couple you can still get the lower rate if someone is caring for only one of you and they claim Carer’s Allowance or the carers’ element of Universal Credit, or if only one of you are eligible and the other partner is registered blind.


What is enhanced disability premium and how much can you get?

If you are eligible for the enhanced disability premium you will be entitled to £19.55 a week if you are single. You get £27.90 per week if you are in a couple and one of you must be eligible.


You can only receive enhanced disability premium if you are under Pension Credit age and you must receive the disability premium or income-related Employment and Support Allowance, as well as one of the benefits below:


Higher rate of the PIP daily living component

Armed Forces Independence Payment

The highest rate of the care component of Disability Living Allowance

You are also eligible if you are in the Employment and Support Allowance support group.


ESA support group

The support group is for those who are assessed as unable to return to work because of their disability or health condition. There is no time limit for payments if you are put in this group and will get you £129.50 per week, even if you are under 25 years old.


To be eligible you must have a limited work capability, be under State Pension age, contributed enough to National Insurance, are not receiving Statutory Sick Pay and not currently work.


You must have been either paid or been credited with National Insurance in the last two to three years as an employee or self-employed.


You are ineligible for ESA if you receive either Jobseeker’s Allowance, Income Support or Universal Credit.


For more information, visit: ESA Support Group: Eligibility and rates.


Council Tax discounts and exemptions

If you are in receipt of the daily living or mobility component of Personal Independence Payment (PIP), you will be able to get money off your Council Tax bill.


The amount will depend on the rate of PIP you are getting.


Council Tax only applies to people living in England, Wales and Scotland. If you live in Northern Ireland, you might be able to pay reduced rates through the Rate Relief Scheme.