How Is Home Care Financed?

It can be difficult to know exactly how to manage the cost of home care. This article explores the funding options available to you and at Ashwood, we value providing quality care at affordable prices.

How Is Home Care Financed?

Home care, also known as domiciliary care, assists older adults who struggle with daily activities such as bathing, dressing, or mobility. It allows individuals to maintain a level of independence and remain in their own homes for as long as possible. In the UK, there are several ways to finance home care:

  1. Local Authority Funding: The local council may cover some or all of the care costs based on a means test.
  2. Self-Funding: The individual or their family pays for all or most of the care costs.
  3. NHS Funding: The NHS may cover some or all care costs in specific situations.

As of 2023 an estimated 23.0% of people using community care services were self-funders (83,844) and 77.0% were funded by the local authority (279,916).

Local Authority Support for Home Care

To determine eligibility for local authority support, the council conducts a needs assessment. If deemed eligible, a financial assessment follows to decide how much the individual should contribute based on their savings and assets. The thresholds for 2024-25 are:

  • England: £23,250
  • Wales: £24,000 with a maximum weekly charge of £100
  • Northern Ireland and Scotland: Free personal care at home for those assessed as needing it, with no means test.

If eligible, the council may provide a personal budget to help manage care costs, allowing the individual to make decisions about their care arrangements.

Self-Funding Home Care

In England and Wales, individuals must self-fund their care if:

  • Their savings and assets exceed the means-test threshold (excluding the value of their home).
  • Their income is sufficient to cover care costs without dropping below a set minimum income level.
  • Their needs are not eligible for local authority support following an assessment.

Even if ineligible for funding, obtaining a needs assessment is beneficial as it formally recognizes care needs, provides information on available services, and facilitates future care arrangements if needs change.

Self-funders have several options to finance their care, including:
  • Savings and Investments: Using personal savings or investments.
  • Income: From pensions, work, or property.
  • Benefits: Ensuring all entitled benefits, such as Attendance Allowance, are claimed.
  • Equity Release: Unlocking cash from the value of a home through equity release schemes.
  • Immediate Needs Annuity: Purchasing an annuity with substantial savings or equity release, ensuring care fees are covered long-term.
  • Downsizing: Selling a larger home and buying a smaller one to generate funds.
  • Financial Help from Family or Friends: Receiving assistance from loved ones.

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NHS Coverage for Home Care

The NHS covers home care costs in specific cases through NHS Continuing Healthcare, which supports individuals with complex medical needs outside of hospitals. This funding is not means-tested and is available for those with significant medical requirements. After a short illness or hospital stay, up to six weeks of NHS-funded care, known as NHS Intermediate Care, may be provided.

Start your care in 4 Simple Steps

Our Registered Manager and care team will provide a FREE visit to discuss your care needs to create a bespoke care plan. There is absolutely no obligation and no cost associated!

Speak to our Care Experts

Our trained experts are on hand to discuss the care requirements for you or your family member. We'll guide you through your options and answer any questions you may have.

FREE care visit with our team

Your local Ashwood Care manager will visit you to discuss your care requirements in further detail and match you with a carer who meets your preferences and has the right skills. We will construct a bespoke care plan for you or your loved one that ensures your requirements are met.

Assist with funding and care plans

We help you understand the different routes to seek beyond self-funding like financial contribution from Government, NHS or local authority. We work with you to manage your costs to ensure we provide care at affordable prices.

Begin caring for you or your loved ones

If you and your loved ones are happy with the care plan, we begin the care visits as scheduled and ensure that your care requirements are met.

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