When considering state-funded care, one of the key steps is undergoing a financial assessment by the local authority. This assessment determines whether a senior qualifies for financial assistance to help cover the costs of care. Understanding the steps involved can help families prepare and ensure a smooth process. In this guide, we’ll walk you through each stage of the local authority financial assessment, including what to expect, documents to prepare, and tips to navigate this process successfully.
What is the local authority financial assessment?
The local authority financial assessment, also known as a means test, evaluates an individual’s financial situation—including income, savings, and assets—to determine eligibility for financial assistance with care home or home care fees. This assessment is essential for those seeking support from their local council to cover the costs of residential or at-home care.
Who needs a financial assessment?
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- Seniors or individuals with disabilities who are seeking financial support for care home fees or home care.
- Those who do not have the financial means to cover the full cost of care independently.
Step 1: Prepare key financial information
Before the assessment, it’s important to gather documents and information about your loved one’s finances. This will ensure that you’re ready to provide accurate information when the local authority reviews their financial eligibility.
Documents to prepare:
- Income statements: Recent bank statements showing pension payments, benefits, and any other sources of income.
- Savings and investment statements: Documentation of all savings accounts, ISAs, stocks, and bonds.
- Property information: If the individual owns a home, provide details such as the property’s estimated market value and any outstanding mortgage balance.
- Expense receipts: Receipts for expenses related to healthcare or disability, such as medications, equipment, or home modifications.
Why this matters: Having these documents ready will make the process faster and ensure that you can provide accurate, comprehensive information to the assessor.
Step 2: Undergo a means test
The means test evaluates your loved one’s income and assets to determine if they meet the financial threshold for state-funded care. In England, the threshold is £23,250 in assets; those with assets above this amount are usually expected to self-fund their care.
What’s included in the means test?
- Income: Includes pensions, benefits, and earnings from savings or investments.
- Savings and investments: All forms of savings and investments are considered, including savings accounts, shares, and bonds.
- Property assets: If the individual owns a home, it may be included in the means test unless a spouse or dependent is still living in the property.
Exclusions from the means test:
- Personal possessions: Items like clothing, furniture, and other personal belongings are not counted as assets.
- Certain benefits: Disability-related benefits, such as the mobility component of Personal Independence Payment (PIP), may be excluded.
Outcome of the means test:
- If assets are below £14,250: Full financial support may be provided.
- If assets are between £14,250 and £23,250: Partial funding may be available, with an expectation of some contribution from the individual.
- If assets exceed £23,250: The individual will likely be expected to self-fund.
Step 3: Complete a care needs assessment
In addition to the financial assessment, a care needs assessment is conducted to confirm the level of care required. This assessment focuses on the individual’s physical, mental, and emotional needs and determines whether they meet the criteria for state-funded support.
What to expect during the care needs assessment:
- A social worker or care professional will review the individual’s daily living abilities, including mobility, personal hygiene, and social needs.
- They may ask questions about health conditions, cognitive abilities, and any support the individual currently receives.
Why this matters: Both financial and care needs assessments are required to qualify for local authority funding, ensuring that funding is reserved for those with significant needs.
Step 4: Review of financial contribution
If your loved one qualifies for partial funding, the local authority will calculate how much they must contribute toward their care costs. This amount depends on their available income and assets, and the remaining costs will be covered by the local council.
How contributions are calculated:
- Weekly income considerations: The local authority will calculate how much income the individual can contribute each week, after allowing for basic living expenses.
- Capital depletion: For individuals with savings or assets between £14,250 and £23,250, a “tariff income” will be calculated, where every £250 in assets contributes £1 to the weekly contribution.
Example calculation:
If an individual has £18,000 in savings, the “tariff income” calculation would be as follows:
- (£18,000 - £14,250) / £250 = 15
- This means an additional £15 per week would be added to their contribution.
Why this matters: Understanding how contributions are calculated helps families prepare for any financial responsibilities they may need to cover.
Step 5: Adjustments for eligible expenses
During the assessment, certain expenses related to healthcare or disabilities may be deducted from your loved one’s income, reducing the amount they must contribute toward their care.
Commonly deductible expenses:
- Medical costs: Prescription medications or specialist treatments.
- Disability equipment: Costs for mobility aids, hearing aids, or other necessary devices.
- Home modifications: Expenses for modifications like ramps or stairlifts if the individual remains at home.
Why this matters: These deductions help ensure that necessary expenses are accounted for, allowing the individual to retain enough income for essential health-related costs.
Step 6: Receive the assessment decision and care plan
Once the financial and care needs assessments are complete, the local authority will provide a decision detailing eligibility and the amount of financial assistance offered. If approved, a care plan will outline the services and support the individual is eligible to receive.
What to look for in the decision:
- Breakdown of funding: Details on how much the local authority will contribute and any amount the individual or their family is expected to cover.
- Care plan details: Specific services covered, such as home care visits, nursing support, or residential care.
- Review dates: Information on when the assessment will be reviewed to ensure that care and funding remain aligned with the individual’s needs.
Why this matters: Reviewing the decision carefully ensures that families understand the financial commitments and the support available to their loved one.
Step 7: Regular review and reassessment
Local authorities typically conduct regular reviews of financial and care needs to ensure ongoing eligibility for funding. These reviews may be conducted annually or sooner if there are changes in the individual’s health or financial situation.
What triggers a reassessment?
- Significant changes in financial status, such as inheritance or asset depletion.
- Changes in health or mobility that may require additional care or support.
Why this matters: Regular reviews help ensure that individuals receive appropriate levels of care funding as their circumstances evolve.
Tips for a smooth financial assessment process
- Be transparent: Provide accurate information about income, savings, and assets. Any inaccuracies may delay the process or affect eligibility.
- Keep records: Retain copies of financial statements, assessment results, and care plans to reference in future reviews.
- Ask questions: If unclear on any part of the assessment or the decision, don’t hesitate to ask for clarification from the local authority.
- Plan ahead: If self-funding is required, consider financial planning options, such as equity release or annuities, to help manage care costs.
Savings Thresholds for Financial Support
| Region | Savings Threshold (Full Funding) | Savings Threshold (Partial Funding) |
|---|---|---|
| England | Below £14,250 | Between £14,250 and £23,250 |
| Scotland | Below £20,250 | Between £20,250 and £32,750 |
| Wales | Below £24,000 | Between £24,000 and £50,000 |
| Northern Ireland | Below £14,250 | Between £14,250 and £23,250 |
The local authority financial assessment process can seem complex, but thorough preparation and a clear understanding of each step can make it more manageable. By gathering essential documents, understanding the means test, and preparing for regular reviews, families can navigate the assessment with confidence and ensure that their loved one receives the necessary support.
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Q&A:
1. What is a financial assessment?
A financial assessment is conducted by your local authority to determine whether you qualify for financial support for care home or in-home care costs. It evaluates your income, savings, and assets.
2. Who needs a financial assessment?
Anyone seeking financial help from the local authority for care services must undergo a financial assessment.
3. What documents are needed for a financial assessment?
You will need proof of income (e.g., pension statements), bank statements, property details, and records of expenses such as medical bills or utility costs.
4. What savings thresholds apply to care funding?
- In England, savings below £14,250 qualify for full funding, while savings between £14,250 and £23,250 qualify for partial funding.
- Thresholds vary across the UK (e.g., £20,250 to £32,750 in Scotland).
5. Does my home count as an asset in the financial assessment?
Your home may be included if no qualifying dependent (e.g., a spouse) lives there. However, temporary stays in a care home usually exclude your property from the assessment.
6. Are state benefits included in the assessment?
Yes, most state benefits, such as Pension Credit, are included. However, disability-related benefits, like Attendance Allowance, may be excluded.
7. How do local authorities calculate my contribution?
The assessment combines your income, savings, and assets to determine how much you need to contribute toward care costs. A personal allowance is usually retained for daily expenses.
8. What if I disagree with the financial assessment outcome?
You can appeal the decision. Contact your local authority, provide supporting evidence, and request a review.
9. What happens if my savings fall below the threshold?
You may become eligible for more financial support. Notify your local authority to reassess your eligibility.
10. How can I prepare for a financial assessment?
Gather all relevant documents, understand your local savings thresholds, and list your expenses to ensure an accurate evaluation.
