December 2020: Funding for assisted living
What funding can I get for assisted living in England?
Assisted living schemes are designed to help people – usually older people, but sometimes younger people who need some physical or mental health support – continue to live independently, in safe, secure and self-contained homes. That means all the privacy you’d want, with help available 24 hours a day for personal and care needs. Assisted living facilities usually include communal spaces, too, to give residents a social scene right on their doorsteps. Our assisted living schemes cater for those 55 years and over.
One of the most common questions we hear, as the provider of schemes across London and the southeast, is: what funding can I get for assisted living? Below, you’ll find all the information you need to know.
How much does assisted living cost?
There is no set rate for assisted living in England because the facilities on offer vary widely depending on the scheme and depending on which extra services you may require or choose.
Monthly fees typically include: rent, a service charge for maintaining communal areas, a core service charge for 24-hour support, social activities, medication ordering and collection etc. If you are a self-payer, you may then choose all sorts of personal care, practical support and social support services (from help with bathing to housework), usually charged at an hourly rate, plus a restaurant charge for daily meals. If you are local authority funded, customers are assessed, and a support plan is built to reflect your needs. If your needs change, this would require a Social Worker Review. Council tax and other personal bills are paid by each resident just as with any other type of independent apartment or house.
Overall, assisted living fees are lower than residential or nursing care.
How is assisted living accommodation funded?
Most people pay all or some of their own costs.
Any additional public funding available to you for accommodation and/or assisted living services generally comes down to two issues of eligibility: your assessed need for a level of personal care; and your financial situation.
As a general rule, if you have savings or investments worth more than £23,250 (correct as of November 2020), you will need to privately fund your place at an assisted living scheme. If you own your own home but someone remains living there, it will not be counted in the financial assessment. It may also be possible to release funding from the local authority which will then be repaid from the sale of your home; this is known as deferred payment.
If you have less than that figure available either in investments or savings and you don’t own your own home, you may qualify for local authority funding. Savings of between £14,250 and £23,250 usually still means you will pay most or all of your own costs. Any savings below £14,250 will not be counted in your financial assessment and the council will pay for your care – although you may still need to make some contribution.
Care and support services are assessed by your local council. Councils generally assess your physical and mental care needs first and, if you are assessed as eligible for support, the council will carry out a financial assessment to establish whether it will contribute to your assisted living fees. They will examine your benefits, pensions or other income, savings, shares and other investments, and request evidence of expenditure related to disability. Some forms of income, for instance disability benefits, may not be counted in your financial assessment.
Even if you believe you have sufficient funds to pay for assisted living for the rest of your life, it is advisable to contact your local council before you make any decisions about where to live. That’s because if the cost of the accommodation you choose is greater than the amount the council would fund if you qualified for assistance, then if in future you become unable to fund your assisted living place, the council may not cover the full cost – which could mean being forced to move to alternative accommodation.
This all refers to your care costs. Rent and service charge is covered by Housing Benefit with a different eligibility criteria.
It is advisable to consult an independent financial adviser (IFA) for financial advice.
Private funding for assisted living apartments
If you are able to, it is best to consult an independent financial adviser (IFA) when working out the best route to fund a move into assisted living, or indeed a residential care home.
Selling your home
Since anyone with assets or savings worth more than £23,250 will need to find their own funding, selling your house is most people’s first choice. Investing a certain amount of the proceeds wisely may even provide enough to earn an income or boost your funds, but it’s important to remember that all investments carry a degree of risk and you could lose the money you invest.
This again only applies to your care costs – there are different criteria and eligibility to qualify for Housing Benefit. You can read more about that here.
Renting your home or property
Renting your home out may provide a larger long-term return than selling it. It is worth noting, though, that rental income is not guaranteed, that you will probably need to pay a letting agent to manage the rental, and that there will be certain ongoing costs in terms of maintenance, insurance and repairs. The income may also be taxable, depending on the rest of your income.
Deferred payment agreement
This is an arrangement with your local authority, whereby the council pays your assisted living or care home fees and the repayments are taken from the proceeds of your home when it is later sold.
Immediate needs annuities
This is an insurance policy. It provides a regular payout after you make a large investment up front. You may also see it referred to as an immediate needs care plan. The income it provides is tax-free if the money is paid directly to a care home or assisting living provider.
Care costs can change, however, which could leave you short. As with any kind of major insurance policy or investment, always get detailed, personal advice from a suitably qualified financial adviser before coming to a decision.
What benefits am I entitled to, to help with assisted living costs?
Below are some of the benefits which may help you fund assisted living. This list is not exhaustive and for the most complete advice on what funding you could receive and the current rules and amounts for each benefit, contact your local authority and read the UK government website. You may also find the Turn2Us benefits calculator useful.
The current State Pension age is 66 years old and will rise to 67 before the end of 2028. It is taxable over the personal income allowance level and is included when you are assessed for care.
Pension Credit is a means-tested top-up for the State Pension for people on a low income. It is assessed according to your income and is not taxed. Claiming Pension Credit will mean you become eligible for Housing Benefit and a council tax reduction.
If you are over state pension age, you may qualify for Attendance Allowance – a tax-free, non-means-tested benefit for people needing help with personal care. This will apply if you need frequent daily help with personal care (getting dressed, washing, toileting, eating and drinking); or if you need supervision most of the time to keep you safe. There is a higher rate for people who need care or supervision both day and night.
Qualifying for Attendance Allowance sometimes increases other benefits, such as Pension Credit, Housing Benefit or Council Tax Benefit.
Personal Independence Payment (PIP)
If you are under state pension age when you first need help – anywhere from 16 years old to state pension age - you may be able to claim Personal Independence Payment for a disability. This is the replacement scheme for the Disability Living Allowance. The PIP is not means-tested and you do not have to have made National Insurance contributions. Assessments are made against a list of daily activities and two mobility elements.
NHS Continuing Healthcare
Continuing Healthcare is designed to support people with a significant and long-term healthcare need, with eligibility decided by your condition and its complexity and effects. There are strict criteria, but it is worth investigating if your disability or illness is severe. Your GP or social worker will be able to arrange an assessment, which comes in two parts; the first being a straightforward assessment to see if your situation is serious enough to warrant a more detailed assessment. The independent body Beacon can give you up to 90 minutes of free advice, including about eligibility.
If you’re unsure about how to fund life in assisted living accommodation, you can always talk to one of our team by emailing email@example.com. We always recommend speaking with an independent financial adviser if you own your own home or have substantial savings, and the Citizen’s Advice Bureau can be extremely helpful in explaining your rights to certain benefits and support, whatever your circumstances.