Paying For Care | The Access Group

In September 2021, the UK government established a new set of payment rules within the Health and Social Care sector as part of the ‘Build Back Better: Our plan for health and social care’ publication. Initially these rules were to come into effect in October 2023, but they were pushed back to 2025 before being scrapped altogether by the new Labour Government.

In July 2024, chancellor Rachel Reeves announced that these reforms would be scrapped as they would save the UK £1.1 billion by the end of 2025-2026.

These new rules included:

1. £86,000 Lifetime Cap, which meant that individuals would not have to pay personal care costs more than this amount over their lifetime.
2. An increase to the lower threshold (from £14,250 to £20,000) and the upper threshold (from £23,250 to £100,000).

The new care funding reforms were to be applied in England only; therefore Scotland, Wales and Northern Ireland were not going to be affected by these changes.
At present there is no cap on care home fees within the UK. 

If you or a relative are beginning to feel less able in your own home, unsafe to manage everyday household tasks, or if you require specialist care, then perhaps you are considering domiciliary home care or moving into a care home if you are struggling to manage on your own.

Care Needs Assessment

It’s important to note that most methods of payment will be determined through a care needs assessment.
A needs assessment will be performed by a health care professional during a visit or via a scheduled phone call. They will ask about your care needs, medical history, healthcare requirements, and things that you may struggle and need support with. With the help of this information the assessor will then create a care plan for you or refer you to a day centre.

If your local council determines that you have eligible care needs following the assessment, they will do a financial means test which will review your finances (pensions,  capital and savings and other benefits like Pension Credit) to decide whether you are entitled to help with the care costs. The means the assessment itself is funded by the NHS, but you can also privately receive one directly from the Care Home you choose.

If, after the means test, you are still required to pay a portion of the care costs, your local authority has the responsibility to ascertain that your income will not drop below the Minimum Income Guarantee (MIG).

If you’re considering care for you or a loved one, it’s important to look into the types of care you can receive. Following your needs assessment you will find out about which type of care is most suitable for your needs.
The price of a room will differ depending on a series of factors, such as your location and the type of care it provides. This can be offset depending on the facilities available.

We understand how, on the scale of your decision-making, the financial aspect can weigh significantly, so we have compiled a comprehensive list of all the available payment options for care.

Self-funded care - Self-funders are people who pay the care home fees themselves, without financial aid from the local council. This is the most straightforward payment method, and you don’t necessarily need to get the council involved. On the flip side you will need to be more careful how you budget, as paying for care homes or carers at home  can be expensive. 

You can cover the care home fees yourself if your assets such as your property, investments and savings exceed a certain threshold (or upper capital limit).

The property will not be included in your assets if you share that living space with a spouse, partner, or child.
If you do live with someone else, the value of your home will be excluded from the financial assessment.

If your home does, however, count toward your capital, you can rent or sell it. Either of these decisions can be difficult so, if you don’t want to sell (or rent) your house right away and you need more time to consider, you can request a deferred payment agreement.

Deferred Payment Agreement (DPA) - The local councils in England, Wales and Scotland offer a DPA, or a Deferred Payment Scheme, this means that they will pay for your care fees and will recover the money after the property is sold or until after you have died.

If you own a property that is not occupied by a partner or a dependent relative, this allows you to delay the decision of having to sell your home in order to pay for your care home fees, and it is only applicable to you if your capital is below the lower threshold.

State-funded care - A state-funded care is when your local council will contribute to the care home payments.
 
In England and Northern Ireland, you can cover the care home fees yourself if your assets such as your property, investments and savings exceed the £23,250 threshold (or upper capital limit). However, the property will not be included in your assets if you share that living space with a spouse, partner, or child.

If your assets range between £14,250 - £23,250, your council can help you cover a part of the costs. And if you have a capital of below £14,250, it will be disregarded from the financial assessment, and your local authority will help you with the fees.

In Scotland, the upper threshold is £35,000. To receive full financial support from your local council you will need a lower capital or at least £21,500.
 
In Wales, if your capital falls below £50,000, your local authority will financially support your care home costs. If your capital exceeds £50,000, you will need to self-fund your care.

NHS Continuing Healthcare funding - If you are an adult individual with a certain disability or complex needs, you may qualify for the NHS Continuing Healthcare Funding. To qualify for this funding, you must meet a Primary Health Need.

The National Framework for NHS Continuing Healthcare clarifies Primary Health Need as follows:

“Where a person has been assessed to have a primary health need, they are eligible for NHS Continuing Healthcare and the NHS will be responsible for providing for all of that individual’s assessed health and associated social care needs, including accommodation, if that is part of the overall need. Determining whether an individual has a primary health need involves looking at the totality of the relevant needs. In order to determine whether an individual has a primary health need, an assessment of eligibility process must be undertaken by a multidisciplinary team…”

If you have been assessed for the NHS Continuing Healthcare and have unfortunately not qualified, you may still be able to receive the NHS-funded Nursing Care. This is when the NHS pays a flat contribution towards your nursing care costs.

Direct Payments - Direct payments are established by your local council and can give you more latitude and decisional freedom on how you wish to improve your care plan. This is known as a ‘personal budget’ and it will be paid directly to you by your local council which will then go towards your care needs.

Here it’s important to note that this personal budget can only go towards the established care plan, and cannot cover everyday expenses like groceries, transportation, rent, utilities, or anything else not agreed within your care plan.

Under the Care Act 2014 this payment method is also not available if you are moving into a care home, but can be used for a short-term stay (up to 4 weeks). And all direct payments must be regularly reviewed to make sure they are used appropriately.

Direct Payments can be used to meet the agreements in your care plan, such as:

• Employing care workers or personal assistants who can provide tailored support to you or your loved one by providing companionship, helping with household tasks, and joining you in taking part in recreational activities.
• Paying for care-at-home services from a relative like siblings, stepchildren, grandparents, or any other family member who does not live with you.
• Making one-off payments for purchasing equipment to facilitate your independent living such as mobility aids, bed levers, riser-recliner chairs, or bathing aids; one-off payments can also be used to cover the respite care costs of your caregiver. 
  
  

As a carer you dedicate so much of your time to ensure that people live healthily and securely that you may sometimes overlook your own personal needs. Extra support in the form of payments can make a meaningful difference by providing financial relief and flexibility in how care is delivered. In this section we are going to take a look at different forms of payment that you can benefit from.

Respite Care - Provides caregivers with short-term breaks to rest and focus on your own wellbeing. During your break, the person you are caring for will temporarily be moved in a care home, or another carer will cover your responsibilities while you are resting and looking after yourself. Prior to receiving respite care, your local authority will need to assess you as needing respite care through a carer’s assessment. If this assessment concludes with showing you need respite care, the council may offer you a personal budget or direct payment.

Carer Direct Payments – Sometimes called personal budgets for carers, personal budgets are set amounts of money given to carers by the local authority. First you will need to request a carers’ assessment for the council to work out if you are eligible. They will ask about how you are managing with caring, what you are struggling with, and how this affects your work-life balance.

Based on your need requirements, they can either formulate a care plan for you or, if you prefer, they can give you a personal budget to spend as creatively as you wish so long as it meets the goals in your care and support plan. 

Care Allowance for Christmas – Carers’ allowance is a sum of £83.30 that is paid per week to people who care for someone at least 35 hours a week. The yearly Christmas bonus is £10.

Gratuitous Care Payments (Family Care Payments) – This type of payment is a volitional and non-contractual payment made by the person receiving care toward the caregiver. These payments acknowledge the importance and value of the provided care and rewards the cooperation, patience and selflessness it takes to support someone into living healthily.


In case the person who is receiving care lacks mental capacity to make financial decisions, they can appoint a Deputy, who will follow a best interest approach in order to decide whether to make the gratuitous care payment on their behalf.

Winter Fuel Payment is a £200 or £300 yearly tax-free payment which you can get to help pay for your heating bills during wintertime.

To be eligible for it you or someone you live with must have been born before 23rd September 1958 (for the year 2025-2026).

The second eligibility criterion is for you to live in England, Wales or Northern Ireland and receive one of the following: 

• Universal Credit,
• Pension Credit,
• Income Support,
• Child Tax Credit,
• Income-related Employment, or
• Support Allowance-ESA

If you meet the criteria, the payment will be made directly into your account between November and December.

You will not be eligible for Winter Fuel Payment if you have been receiving free treatment in a hospital for over a year, or if you lived in a care home from the 24th June – 22nd September 2024.
Winter Fuel Payment will also not be available  if you live in Scotland, but you may qualify for its equivalent, Winter Heating Payment.

Sleep-in or overnight shifts are work shifts where carers are expected to stay overnight in a care home or in a person’s home. They will be woken if their immediate assistance is needed during the night.

In March 2021, in the case of Royal Mencap Society v Tomlinson-Blake and Shannon v Rampersad, the UK Supreme Court ruled that carers are only entitled to the National Minimum Wage for the hours spent awake and performing work tasks, underlining the difference between ‘being available for work’ (on-call) and ‘actively working’.

However, this is situational. For the carer to not be paid for the sleep-in shift, the employer is required to provide them with proper sleeping accommodation. If the carer is not provided with this, then they are entitled to the National Minimum Wage for the entire duration of the shift.

If you would like to read through more case examples and circumstances, you can access the Government wage calculator for said shifts. You will find all the examples under the section called Special situations.

In this article we’ve explored the patchwork of payment options for care, from legal arrangements to informal payments to other benefits available in the UK, but we also looked at how every form of payment comes with its own set of arrangements and eligibility criteria while also acknowledging their limitations.

Paying for a care home or for domiciliary care is something that needs to be researched carefully due to the complexity of the commitment. You will need to navigate means tested financial assessments in order to determine if you need to contribute from savings or if you can access state funding. Understanding the payment alternatives is key to budgeting and managing care fees effectively, ensuring seamless, continuous care provision for you or a loved one.

We also covered how caregivers (both care workers and family members) can receive extra support. Carers play a crucial role within the Health and Social Care system in supporting vulnerable individuals.

We appreciate that the practice of caregiving in general comes with its emotional and practical challenges, so it’s important to provide carers with appropriate support; be it in the form of personal budgets, family care payments or other benefits to show them that they are, in turn, also looked after.