What is a financial assessment?

The financial assessment (or means test) works out how much you’ll have to pay towards the cost of your care. It’s carried out by your local council. It is separate to the care needs assessment which looks at what your care needs are, such as a need for residential care.

The financial assessment will consider:

  • your income, including pensions and benefits
  • your capital, including savings.

It may include the value of your home if you own it, but this isn't always taken into consideration. This is different to the rules about paying for care services at home.

What you'll have to pay

Nearly everyone will have to contribute something towards their care home fees. The council works out how much you'd pay by looking at:

Your capital

Capital includes money or items that have a financial value, for example, savings, investments, land and property.

In England, if you have capital:

  • over £23,250 – you’ll have to pay all your care home fees until your capital drops below this amount
  • between £14,250–£23,250 – you'll have to contribute most of your weekly income towards your care home fees. You'll also pay an assumed extra income of £1 per week for every £250 of capital you have between these two amounts
  • under £14,250 – you won’t have to use this to pay your care home fees. You’ll still have to contribute most of your weekly income.

Your property

If you own your home, its value isn’t always included in the financial assessment. For more details, read our page Do I have to sell my home to pay for residential care?

Your income

If the local council is paying towards your care, you will usually have to contribute most of your income, apart from a small Personal Expenses Allowance. This is currently £25.65 a week in England. You might also receive £5.90 a week if you're single, or £8.85 if you're in a couple, through the Savings Pension Credit disregard.

Some amounts are ignored when calculating your income, for example:

  • certain benefits, such as the mobility components of Personal Independence Payment, Disability Living Allowance or Armed Forces Independence Payment
  • half of private pensions or retirement annuities, if you’re giving them to a partner who is living at home
  • the income and capital of your partner, if you have one
  • regular payments from a charity.

If the council thinks you've given away your assets to avoid paying for care, they may still count them in the financial assessment. For more details, read Your assets and the financial assessment.

Getting your personal budget

Your council will tell you if they’ll pay some of your care costs, and if so, how much. The total amount they think your care should cost – including their contribution and yours – is called your personal budget. It’s based on your eligible needs and factors like the cost of care in your area. It must be high enough to pay for what the council say you need.

Top-up fees

The council must show that at least one care home in the area can provide the care you need at the rate of your personal budget, and has a place available. If this is not the case, the council must increase your personal budget amount. This may increase their contribution towards your care.

If there is a care home available at the rate of your personal budget but you’d prefer a more expensive care home, you may be able to move there instead if someone else will pay the difference – for example, a family member, friend or charity. This is a third-party top-up fee. You can't usually pay your own top-up fees, except in very few circumstances.

Read more on Care home top-up fees.

Help from the NHS

In certain circumstances, the NHS may be responsible for paying for your care. If you have a high level of health and care needs, you may qualify for NHS Continuing Healthcare.

If you aren’t able to get this but it has been decided that you need nursing care in a nursing home, you'll qualify for NHS-funded nursing care. This would pay for the nursing you receive in a nursing home, but not the accommodation costs.

Find out more about NHS funding for care.

Paying for your own care (self-funding)

Even if you’re paying for your own care, it's a good idea to get a care needs assessment from your council. The council must then give you a written assessment of your care needs, which can help you to decide if you need to move to a care home. They must also make sure you’re able to get financial information and advice to help you plan and pay for your care. They should also be able to help you find out about care homes in your area if you need this.

For more information on your options if you're self-funding, read Paying for care yourself.

Next steps

Start by arranging a care needs assessment – read our factsheet First steps in getting help with your care needs for information and contact your local council to arrange one.

For more about the financial assessment, read our factsheet Paying care home fees. You can also read our guide Paying for your care if you're likely to be self-funding.

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