A guide to paying for care for the elderly

Some 10% of people aged over 65 face care costs of more than £100,000 over their lifetime

Working out how much you might have to pay if you, or a relative, needs to go into care is daunting.

The current position on social care fees - the cost of care outside free NHS provision - is complex and it varies depending on where you live in the UK.

The government has recently published an independent review of social care funding and support in England, drawn up by Andrew Dilnot.

The headline suggestion of the Dilnot recommendations is that care fees to be paid by an individual in their lifetime will be capped at £35,000.

Currently, fees paid by individuals are potentially unlimited.

Dilnot's plan

This £35,000 limit is, however, still a suggestion which could be increased by the government.

This figure also only relates to care fees and there is an additional amount recommended, of £7,000 to £10,000 per annum, to be charged for what are sometimes called the hotel costs: food, heating, lighting etc.

The report says that this is only fair, since the person would have to pay for that anyway, wherever he or she was living.

The report says the means-tested threshold - the level of assets which an individual can own before they are liable to pay for the full cost of their social care needs - should rise from the current £23,250 to £100,000.

The £35,000 lifetime cap on fees would apply thereafter.

There should also be a national eligibility criteria, and portable assessments introduced, to ensure greater consistency.

So if you move to another local authority you should not need to be reassessed, as you will be required to be now.

The current position

Say your close friend or relative, Ted, is admitted to hospital, perhaps following a fall or a stroke at his home.

His doctor has said that he cannot return home because he would not be able to cope.

Ted is a widower with a house worth £250,000 and yearly pension income of £10,000.

He is currently entitled to be assessed before he leaves hospital for fully-funded (non means-tested) NHS continuing care.

Fully-funded NHS continuing care is care provided in hospital, a care home or in one's home.

Eligibility guidelines are set down by the government but interpretation of those guidelines is up to the local NHS trust (in England and Wales).

NHS continuing care is not the same as the nursing care contribution - a flat rate of £101 per week paid to care homes on behalf of residents.

Who gets it?

Eligibility for NHS care is not an objective test based on diagnosis, but an assessment of the needs of the patient.

If you do not qualify for free NHS care, you must pay for some of your social care, says Susan Midha

Take for example two patients, both with Parkinson's, both due to be discharged to the same nursing home.

One of them has breathing difficulties, double incontinence, an unstable medical condition and needs regular supervision from, say, palliative care specialists.

His nursing home fees will be paid for by the NHS regardless of his means.

The other patient's needs do not, in the opinion of the medical staff making the assessment, meet the eligibility criteria.

He will pay for his own care until his capital falls to below the current limit.

At this point the local authority will contribute to his funding, or under the new Dilnot proposals till he has paid fees up to the suggested £35,000 cap.

Advocacy

It is the NHS which has to find the funding if it concludes that continuing care does apply, and the NHS makes that assessment.

This is why it is important that the patient awaiting discharge has an advocate to make sure that appropriate care is provided and appropriately funded.

If you think a friend or relative may be paying for his or care inappropriately, you can challenge the local authority's decision.

You may want to employ a solicitor with experience of such cases who will be able to guide you through the process.

Sometimes it is necessary to challenge the criteria themselves as there are still health authorities whose criteria do not conform fully with the law as laid down by the courts and the Department of Health guidelines.

What would change?

NHS continuing care is not affected by the new Dilnot proposals.

To do so would almost certainly require a politically unacceptable change to NHS legislation or the risk of a major challenge in the courts.

It would effectively mean that NHS care is no longer free at the point of entry for elderly people.

But let us assume that Ted does not qualify for NHS continuing care.

Currently, his social care will be means tested and the house will be taken into account after he has been in care for 12 weeks.

That means that to start off with, only his pension will be used to fund his care, leaving him £16.05 a week for personal expenses.

The balance of the care fees will be paid by the local authority, subject to the limit of the price per bed that that local authority will pay.

Once Ted has been in care for three months his house will be brought into account as capital available for his care.

He will then be required to fund himself until his capital goes below £23,500.

'Not fair'

If Ted has, say, dementia he could be in care for several years and his entire capital could be used up leaving him only £23,500 to pass on to his family.

Andrew Dilnot suggested a lifetime limit of £35,000 in contributions to your own social care

Whereas if he were in care for only a short period of time, the majority of his capital would be preserved.

The Dilnot report says that the scenario above is not fair and that care fees should be capped.

But it has rejected a blanket tax on all people, whether or not they need care.

As now, under the new recommendations care will only be paid for by those who need it.

In our example, Ted would pay his care fees, up to a maximum of £35,000, with the local authority paying after that figure.

In addition, each year he would pay between £7,000 and £10,000 for general living expenses.

If Ted's initial capital were between £14,250 and £100,000 he would contribute on a sliding scale to his care.

The balance would be paid by the local authority, but he would not pay more than £35,000 for care (as opposed to living expenses) during his lifetime.

Informed debate

Dilnot emphasises in the report that the current system is not fit for purpose and obtaining information about it is very difficult.

Understanding how the system currently works however can greatly contribute to ensuring that your friend or relative receives the care which is right for him or her.

An informed nationwide debate of the Dilnot proposals will help to ensure that we receive the care funding arrangements we deserve.

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