Charging for Care and Support in a Care Home
People receiving care and support in a care home will be expected to contribute towards the cost of their care in line with the regulations set out in the Care Act 2014 and associated guidance.
Living Expenses - Residential Care
People living in a care home are entitled to retain a certain amount of their income to pay for personal costs not met by the care home. This amount is set by the Department of Health and is known as the Personal Expenses Allowance (PEA).
Treatment of property
The financial assessment will take into account the value of any property that is owned, including the persons main or only home as well as the value of any additional properties.
Mandatory property disregards
In certain circumstances the council must disregard the value of the persons main residence, for example if after the person moves into a care home, the property continues to be occupied by a spouse or a qualifying relative aged over 60 as set out in the legislation.
Discretionary Property Disregards
The council may also use its discretion to apply a property disregard for the persons main residence where a mandatory disregard does not apply. For example, this may be where the property is the sole residence of someone who has given up their own home to care for the resident, or for someone who is an elderly companion of the resident.
Any request for a discretionary disregard will need to be considered in the wider context of the overall financial budget for Adult Social Care in Southend and to ensure that care home residents with assets are not maintained at public expense.
The 12-Week Property Disregard
If the person is moving permanently into a registered care home, the council will disregard the value of the property they are vacating for the first 12 weeks of their residency.
The disregard will end if the property is sold within 12 weeks and the resulting capital will be included in the persons assessment.
All property disregards will only apply to what was the persons main residence prior to them going into a care home.
Deferred Payment Agreements
If the persons main or only home is not already disregarded, the council will offer a Deferred Payment Agreement to allow them to defer the costs of their care and support until a later date. This will normally be until the person sells their home, or when they pass away.
Deferred payments will normally be secured by a legal charge against the persons property, and in most cases the council will expect this to be the first charge against the property.
The council will charge a single, flat rate for arranging and administering a deferred payment agreement. This will be non-refundable, and the amount will be set annually. Payment of the fee must be made up front before the agreement is in place.
In some cases, a full valuation of the property may be required when setting up the deferred payment agreement. Where this is required, the cost will be the responsibility of the individual whether they arrange the valuation themselves or ask the council to do it for them. This cost will be non-refundable, and individual can choose to pay this fee up front or add it to the loan, in which case it will be subject to the same interest charges as the rest of the loan.
The council will apply interest to any amount deferred, which will be calculated on a compound basis. This will be charged at the maximum level of interest set nationally, which is reviewed on a six-monthly basis.
The Council will operate its Deferred Payment Agreement scheme in line with the relevant regulations and national guidance.
Whilst a Deferred Payment Agreement is in place the Council will take all reasonable steps to ensure that:
- the debt owed to the Council and accruing during the agreement is secured by a charge on the property
- the person or their representative has taken appropriate steps to ensure the property is properly maintained, insured, and secured to maintain its market value
- the debt does not exceed the loan to value ratio set out in national guidance
- the security offered against the property is adequate to meet the debt. If this is not the case the Council reserves the right to decline to enter into a Deferred Payment Arrangement
If an individual does not want to sell their property (or make other arrangements) and chooses not to take advantage of the Deferred Payment Agreement scheme, they may need to arrange their own permanent placement in a care home.
Top-up payments
If a person chooses to receive care that is more expensive than the council has assessed they require to meet their eligible needs, they or their families can top-up the costs to purchase the care of their choice.
The Council will ensure that it offers an option which is sufficient to meet the persons eligible care needs and any top-ups will be the individuals choice.
Where the person receiving care or a third party wishes to enter into a top-up arrangement, they will be required to enter into a legally binding contract with the Council which sets out the terms and conditions of the arrangement.
If the top-up ceases to be paid, the Council is under no obligation to increase its funding contribution to cover the difference in cost. This may result, for example, in the person having to move to other accommodation unless, after an assessment of need, it is shown that their assessed eligible needs can only be met in that current accommodation
First Party Top-Ups
The person receiving care can only pay the top-up themselves in the following circumstances:
- they are subject to a 12-week property disregard (but only during the period of that disregard)
- they have a deferred payment agreement in place with the Council and this must reflect the first party top up arrangement
- they are in accommodation provided under Section 117 of the Mental Health Act
Third Party top-ups
Third party top-ups are paid by a third party (someone other than the person receiving care) who is willing and able to meet these additional costs for the likely duration of the care arrangement.