How Do the Changes in Capital Limits Affect Those Who Need Residential Care?

There are several different ways to finance long term care, or residential care, for older consumers. However, determining how to pay for this care can be quite stressful, with several different benefits available, most of which require different application processes and each having their own assessments. So, while the process can sometimes be confusing or complicated, consumers do have options available to them to help them offset the rising cost of healthcare as they approach the years in which they will need long term or residential care.

In some situations, residential care can be paid by the NHS under a benefit known as NHS Continuing Care. There are several reasons why a consumer would be deemed eligible for this benefit, which would pay the cost of residential care. The consumer may need what is referred to as ‘intermediate care’ or they may have been a mental health inpatient at some point in their life. The consumer may also be found to only need temporary residential care. Temporary residential care usually means 8 weeks or fewer. Care may also be paid through this benefit if the care is needed for a child. If none of the above instances apply, the consumer will undergo a financial assessment, in which their assets, savings, and other investments will be tallied and totaled to determine the ability of the consumer to pay for their own care.

During this assessment process, different capital, property, and assets are totaled systematically. For example, a consumer’s home, if owned by them, will be tallied systematically and according to assessment rules to deem if that property should be included as an asset in the consumer’s ability to pay for their own care. The asset limit for residential care is £23,250.

This capital limit truly affects how a consumer will pay for their long term care or their residential care. If the assets and savings of the consumer exceed this capital limit, they may be required to pay for all or part of their own care, which can seem quite daunting. If the consumer must pay for their own care, they are referred to as ‘self-funders’ and they will typically be given as much advice as possible once they learn that they will be required to pay for their own care. This advice can be further discussed with an independent adviser who may be able to help the consumer gain some insight in the best ways to offset the costs associated with their care.

Once the capital of the self-funder reaches the £23,250 mark, the local authority will need to step in again to re-assess the consumer’s financial situation. In all likelihood, the local authority would need to assume some responsibility for funding the consumer’s long term care or residential care. There are different levels of financial assistance available to consumers depending on their assets. Some funders will fall to levels that will enable them to get some financial assistance while others may fall to a level that gets their entire tab paid for by their local authority. What is most important to keep in mind is that the level that needs to be reached is £23,250, or the capital limit for residential care.

As consumers approach needing long term care, they are often faced with decisions based on how they will pay for that care. Although the local authorities are available for assistance, sometimes financially, consumers should stay well educated on what is available to them in order to ensure that they receive every benefit available for their particular situation. The capital limit for residential care is one aspect of funding that consumers should know before they start thinking about how to fund their long term care.