A local authority will carry out a financial assessment to determine whether a person is liable to pay the full cost of their care, or a contribution towards the cost. A local authority has discretion to charge for services provided, other than in some prescribed circumstances where care must be provided for free. Although the local authority has discretion to charge, the actual amount a person will pay towards the cost of their care depends on the level of their capital. What are the thresholds for social care? The current capital thresholds in England are: Your capital What you will need to pay £23,2350 or more You have assets above the threshold and are liable for the full cost of your care. Between £14,250 and £23,250 The local authority will pay a contribution towards your care, but you will need to pay the remaining balance from your income. Whilst you have capital more than £14,250, you will also need to pay a “tariff income” – this is currently £1 a week for every £250 of capital you own. Less than £14,250 Your capital is disregarded but you will need to pay a contribution from your income. What does a financial assessment involve? You (or someone acting on your behalf) will be asked to complete a form detailing your income and assets. Depending on your personal circumstances, you may also need to provide details of your expenditure. You will usually need to provide the local authority with evidence, such as bank statements to show your capital or a tenancy agreement to confirm rental costs etc. Are all assets included in the assessment? There are various types of assets that should be “disregarded” from a financial assessment. These assets must be excluded from the assessment and the value should not be included when calculating the level of your capital. You will not be liable for the full cost of your care if the value of disregarded assets takes your capital below the upper threshold of £23,250. A local authority should therefore not presume that a person is a self-funder, even if they have extensive assets. Some disregarded assets may lose this status if they are encashed or sold, meaning that the cash value from the proceeds will be taken into account for the assessment. It is therefore important to consider taking financial advice prior to liquidating any disregarded assets. How will my property be treated? The value of a property will be taken into account as part of the assessment, unless there are any circumstances that require it should be disregarded, or treated as having a nil-valuation. What about jointly owned assets? Unless it is a disregarded asset, the value of your share of a jointly owned asset will be included in an assessment. This may not be as simple as dividing the value of the asset by the number of owners (for example, halving the market value of a property owned by two people) and care should be taken to ensure that the local authority has valued assets appropriately. Will all my income go towards the cost of my care? If you have capital below £23,250 you will be required to pay a contribution towards the cost of your care from your income. The local authority should consider your other expenditure when calculating this contribution and must ensure that you retain a minimum monthly income for your own personal expenditure. What if my position changes? If you have been assessed as being fully self-funding, you should contact the local authority to seek a reassessment if the value of your capital starts to deplete. You should contact the local authority sooner rather than later. You should inform the local authority prior to reaching a particular capital threshold as the local authority may only contribute towards the cost of your care from the date it was notified of the change in your capital, not the date your capital actually fell below the threshold. Likewise, if you are assessed to only pay a contribution towards your care, you should inform the local authority if your capital is expected to exceed the upper threshold. How can Morr & Co help with financial assessments? Morr & Co can help with advice relating to: The completion of a financial assessment Disputing the outcome of an assessment Disregarded assets The treatment and valuation of jointly owned assets If you would like advice regarding any of these matters, please contact Alice Watkins who is an Associate Solicitor in our Court of Protection department. Disclaimer Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position. Authored by Alice Watkins Associate Solicitor Message Tags Insights On this page Contact our team today to find out more Contact us
