More care home residents will have to self-fund as means-test threshold frozen for 10th year

Story corrected 15 September 2021*

More and more people will have to privately fund their care after the government froze the capital thresholds that gatekeep access to public funding for the 10th consecutive year.

The upper capital limit – above which people must fund their permanent residential care in full – will remain at £23,250 from April 2020, while the lower limit, below which people receive full public funding subject to them foregoing much of their income, stays at £14,250, a circular issued by government today said. 

For care outside a permanent care home placement, the capital limits act as minimums, with local authorities free to be more generous.

The upper limit has fallen by £4,500 in real terms since 2010, pushing more and more people into self-funding, said Simon Bottery, senior fellow, social care, at the King’s Fund.

“The effect is that publicly funded social care is being denied to more and more people,” he said.

‘A symbol of wider policy indecision’

Bottery added: “Though social care has other, more urgent, issues to tackle right now this matters because it affects people directly –  they have to pay for themselves, rely on family or go without – and as a symbol of a wider policy indecision that has beset social care for too long.”

The government also froze the personal expenses allowance – the weekly sum that publicly-funded care home residents are allowed to keep from their income – for the fifth consecutive year, at £24.90.

The minimum income guarantee – the minimum weekly income that people receiving publicly-funded care outside a care home must be left after charging – was also frozen for the fifth year in a row.

What does the guidance say?

The Department of Health and Social Care annual circular on charging for care and support says that the lower and upper capital limits will remain at £14,250 and £23,250 respectively in 2020-21, meaning that individuals with less than £14,250 in assets (in most cases, including their home) do not have to pay for their care from their savings.

Their fees are paid by their local authority, though such individuals must contribute to this from their income – including most state benefits and pension income but excluding any earnings – so long as they are left with a weekly personal expenses allowance (PEA) of £24.90 per week in a care home. This allowance could be used to pay for items, such as toiletries or reading materials.

The PEA has remained at this level since 2015.

If an individual has assets worth more than £23,250, the upper capital limit, they must pay the full cost of their residential care without help from the council.

A person with assets between the capital limits must pay what they are obliged to from their income, plus a means-tested contribution from their assets (calculated as £1 per week for every £250 of capital between the capital limits).

Capital includes buildings, land, savings or shares, but the regulations around charging and financial assessment specifies that certain assets are disregarded, such as those derived from a personal injury award.

Where a person owns their own home, this is generally taken into account when they are admitted to a care home as a long-term resident, unless the property is occupied by certain loved-ones or relatives.

For people receiving care other than as a permanent care home resident, local authorities may apply more generous capital limits than £14,250 and £23,250 but cannot go below them.

For people receiving care at home, the minimum income guarantee, the minimum weekly amount they must be left with after charging, remains at 2015 levels. The amount an individual receives differs dependent on their age and whether they have dependent children, are a lone parent or are in a couple.

*The story originally wrongly said that the capital limits only applied in residential care. While they are mandatory for people in permament residential care placements, they also apply as minimum limits for people receiving care in other settings, with local authorities given the discretion to be more generous.