How is the Cost of Residential Care Calculated?

If you, or someone you love, are currently being tasked with paying for some form of residential or long term care, the price tag may seem daunting. Determining how to pay for care is a necessary evil, but it is also crucial to become educated on how cost of resident care is calculated so as to ensure that you are receiving every benefit available to you and your family.

There are instances in which residential care can be completely covered by the local authority. This could be because you, as the consumer, are deemed unable to pay for your own care based on your financial situation. In other cases, you may be eligible for NHS Continuing Care. A consumer may also be deemed entitled to full coverage of their care if what they need can be deemed to be primarily for nursing care. Lastly, the local authority may in fact just decide to cover the cost of care. This typically takes place if the length of time in the residential setting is expected to be very short or if the individual needing attention is a child. These are the instances in which care may be free to the consumer. However, there are often instances in which the consumer would have to pay for their own care, either in part or in full.

Once it has been deemed that you need long term or residential care, you will undergo a financial assessment, or means-test. This means that the local authority will try to gauge your ability to pay for your own care. This means test will include all of your assets as well as any savings, property or investments that are available to you. Those who need to pay for their own care are referred to as ‘self-funders’ and there is a new cap instituted in how the cost of residential care is calculated for those self-funders. However, the cap on costs has several loopholes of which consumers should be aware. First, the cap only covers care services. That means that anything like room or board is not included under the cap. Secondly, and very importantly, the costs are not calculated out as money. This means that once the cap is reached, the local authority will cover the cost of care but only at a standard rate. This rate may not in fact align with what the consumer had been paying for their care. This then means that the consumer has to come up with the difference between what they were paying for care and the allocated amount from the standard payment made by the local authority.

So, there are several ways in which the cost of residential care is calculated. However, consumers should be aware of all options available to them, especially if they qualify for any kind of benefit or are eligible for additional support after they have reached the cap on cost of residential care.