If you are unable to live independently in your own home, even with extra support. You may need to consider residential care. Before funding can be considered, we must perform a care needs assessment. To confirm that residential care is the most appropriate way to meet your eligible needs.
When you enter residential accommodation, you are required to contribute towards the cost of your accommodation, depending on the length of your stay and your ability to pay.
In general, care falls into two categories:
- temporary or short term care /Respite residential care is any stay in residential care up to 52 weeks, where you intend to return to your home.
- permanent or long-term placements are provided when you require ongoing care in residential accommodation.
There are residential care homes across Lincolnshire which will meet different care and living needs. The Lincolnshire Care Services Directory can help you in your search for care and support in Lincolnshire.
To find out more about care homes and the standards you should expect, visit the Care Quality Commission (CQC) website. The CQC is an independent inspectorate for all health and social care in England. This includes care homes and home care services.
How much will I have to pay
Following your care needs assessment, if you want to request financial help toward the cost of your care, you will need to complete a Financial Assessment. This assessment will ask for details about your income, including any pensions and state benefits you receive, as well as any assets you own.
The financial assessment will work out the maximum amount you can afford to pay towards your residential care based on your personal finances. If you qualify for funding, we will work out how much you will have to pay towards the costs. This is based on your income and capital.
If you have more than £23,250 in capital (including savings, investments, land, or property other than your main home). You will usually be responsible for paying the full cost of your residential care.
Should your capital reduce to close to the limit due to care costs. You can apply for funding assistance later if you still meet the criteria for residential care.
If you have to live in a registered nursing home and need nursing care, the NHS will contribute towards the cost of your care.
Do I have any choice over the costs of my care
As part of your care planning, your key worker will discuss the type of accommodation that will meet your needs. Ensuring that at least one option available to you is affordable within your budget.
Where you have been assessed as requiring a certain type of accommodation you have the right to exercise choice between providers in certain circumstances. Which includes anyone who is receiving aftercare services under the Mental Health Act.
If you choose a care home that charges above our expected costs, then a 3rd party top up may be required. This will cover the difference between our expected costs and the actual cost of the home and must be paid by a third party.
In certain circumstance you can pay your own first party top up. These are limited to
- during any 12-week property disregard period
- if you have made a Deferred Payment Application
- you are exempt care charges due to receiving care under section 117 of the Mental Health Act or as a result of contracting CJD
Personal Expense Allowance (PEA)
Before any charges are made towards the cost of your care home, we need to ensure you are left with a minimum amount of income. This is known as the Personal Expense Allowance (PEA). And is set nationally each year by the Department of Health and Social Care. This is to ensure that you have money to spend as you wish on personal items such as clothes and other items that are not part of your care.
Will my home count as part of the financial assessment
For a temporary stay the value of your main or only home is not included in the calculations. As the intention is that you will return home. You will be allowed additional expenses to maintain your home during your temporary residential care stay.
If you are moving into a care home on a permanent basis, the value of your home will be included in your financial assessment calculation, unless any of the following apply:
- your husband, wife, partner or former partner continues to live there, except where they were estranged since before you went into a care home
- a close relative aged 60 or over continues to live there
- a lone parent who is the person's estranged or divorced partner continues to live there
- a relative under 60 who is incapacitated, and receives certain disability allowances continues to live there
- a child under 18 for whom you are financially responsible continues to live there.
To make sure you have enough time to make the right decision about moving into a residential care home we can allow up to 12 weeks at the start of permanent / long-term care where the value of your home is not considered. This is called the 12 week property disregard period.
Managing Finances When a Spouse Moves to Permanent Care
When a partner moves into permanent residential care, the Department for Work and Pensions (DWP) no longer consider you a "couple" for benefit purposes. Because you are now living apart, you must be reassessed as two single individuals. You should report any change of circumstances to the Department for Work and Pensions as soon as possible. Your benefits will be reviewed to ensure you are financially independent.
You should also consider ways to maximise your income by checking the benefits and financial support you can get on GOV.UK
Using your home to pay for residential care
Deferred payment agreements
A Deferred Payment Agreement (DPA) is an option that may help you pay for long term residential or nursing care without having to sell your home immediately.
If most of your money is tied up in your property, a DPA lets us pay some of your care costs for you. The amount you owe is then repaid later, usually when your home is sold.
How it works
The scheme offers you a loan using your home as security. It is not like a conventional loan where you get a fixed sum of money. Instead, we will pay an agreed amount of your care costs every week, on the condition that you repay us later when you sell your home. This could be when you choose to sell it in your lifetime or after you have died. You can also repay us from another source if you want to.
- you will pay a weekly contribution towards your care that you have been assessed as being able to pay from your income and other savings.
- we will pay the part of your weekly care costs that you can’t afford whilst your home is your main asset. This is called your ‘Deferred Payment’.
- you repay the amount later, usually from the sale of your home or your estate.
Types of Deferred Payment Agreement
There are two types of Deferred Payment Arrangement:
- a traditional Deferred Payment Agreement is where we arrange your care and pay the care home directly. You then make a weekly contribution based on what you can afford, and the rest of the cost is deferred and repaid later. With this option, you may qualify for a 12 week property disregard and a Disposable Income Allowance to help with essential home costs.
- a loan type Deferred Payment Agreement is different because you arrange and pay the care provider yourself. We will loan you the money in instalments to cover the fees. Usually at the care home’s self funding rate. There is no 12 week disregard or Disposable Income Allowance, and you are responsible for maintaining and insuring your home.
With both types, the deferred amount becomes a debt that is repaid later. Often when your property is sold or from your estate.
If you choose a Loan-type Deferred Payment Agreement (DPA)
If you select a Loan-type DPA, the loan can only start once a legal charge is secured against your property. This legal process usually takes several weeks to complete.
During this time, you will need to pay for your care using your own money, such as your savings or income. Once the legal work is finished and the charge is in place, the loan will begin covering your care costs.
Qualifying for a Deferred Payment Agreement (DPA)
Generally, anyone who lives in Lincolnshire and owns their own property can apply for a DPA to cover the cost of care. These assessments take time to arrange and complete. Therefore, it is recommended that as your savings reach £30,000 you may wish to contact us to ask for a referral.
The following must also apply:
- your total savings and assets (excluding your main home's value) must be under £23,250.
- your home must not be disregarded in your financial assessment (e.g., it is not occupied by a spouse or dependent relative).
- you must agree to have the local authority place a legal charge (a form of security) on your property. And all owners must sign the required documentation.
- there must be no other significant financial interest on the property (like an outstanding mortgage, loan, or equity release scheme). Unless the local authority and the person with beneficial interest specifically approves it beforehand.
- you must meet Lincolnshire County Council’s needs criteria for support with care.
If your property has been disregarded from your financial assessment. You will not be eligible for a deferred payment.
12 Week Property Disregard
A 12 week property disregard is only available with the Traditional Deferred Payment Agreement. We will check if you are eligible for this through a financial assessment.
If you are eligible the value of your main or only home will be left out of your financial assessment for up to 12 weeks. This period normally begins when you move into permanent residential or nursing care. The purpose of the 12 week disregard is to give you time and space to consider how you wish to pay your care home fees and make informed decisions about your longer term arrangements.
The costs and charges involved
The Care Act 2014 allows us to charge interest for the duration of the deferred payment agreement. This rate will be set each year and changes on the 01 January and 01 July each year. This applies to both types of deferred payment agreement.
We will also charge an administration fee to cover costs but will not make a profit from the arrangement.
Alternative options
You do not have to enter a Deferred Payment Agreement. You can choose to pay your care costs using your income, savings or other assets, and in some cases a family member may contribute instead.
You might also decide to rent out your property, which could provide enough income to cover your care fees. This option may help you avoid taking on a deferred payment, interest charges or administrative fees, and it ensures your home remains occupied.
Other financial products may also be available depending on your circumstances.
Before choosing the best option for you, it is important to seek independent financial and legal advice.
If you lack capacity and require a financial deputy or attorney
If you are unable to manage your own financial affairs, a registered attorney or financial deputy can enter into a Deferred Payment Agreement on your behalf. If you already have a Lasting Power of Attorney (LPA) for finance or a registered Enduring Power of Attorney (EPA), your attorney can sign the agreement. For a loan type agreement, this legal authority must be in place before it can begin.
If you have lost capacity and no one is legally authorised to act for you, a relative, friend or solicitor will usually need to apply to the Court of Protection to become your financial deputy. While this application is in progress, we cannot start a loantype agreement. But it may fund your care under the traditional arrangement. Any costs paid during this period must be repaid once the deputyship or LPA is granted.
If we believe a deputy or attorney is not acting in your best interests, we will refer the matter to our safeguarding team. Which may lead to an investigation by the Office of the Public Guardian and possible removal of your deputy's authority to act on your behalf.
Ending the agreement
The Deferred Payment Agreement ends when the full amount owed is repaid, either during your lifetime or from your estate after you die. If the agreement ends because of a person’s death, the outstanding balance becomes payable 90 days later. Interest will continue to be added until the debt is fully cleared.
You can sell your home to anyone you like, even a family member, but it must be sold for the market value.
A deferred payment comes to an end :
- if you repay the full amount due
- if you sell your property and we are repaid from the proceeds of the sale
- on your death and the amount is paid back from your estate
How to apply
In order to apply to enter deferred payment agreement, you must:
- meet the eligibility criteria as set out above
- if the property is not registered at HM Land Registry, you must arrange for it to be registered at your own expense. Alternatively, our Legal Services team will complete the registration to enable the charge to be applied to your property and will charge you for this
- have mental capacity to agree to a deferred payment agreement or have a person with legal authority to act for you and who is willing to agree to enter into the deferred payment agreement, e.g. an attorney or a financial deputy
- complete an application form
You should take independent financial and legal advice before applying. If you decide to enter a deferred payment agreement, please contact us by phoning 01522 782155. Or by emailing Fin_Payments@lincolnshire.gov.uk
Care homes costing more than our agreed rates
Top up payments
If you choose a care home that costs more than we have allocated for your care, you or someone else will have to make extra payments to cover the shortfall. These are known as ‘top-ups’.
- third‑party top-up fees are paid by someone other than the resident. Such as a family member, friend or charity, when the chosen accommodation costs more than the standard amount covered.
- first‑party top‑ups are payments you can make yourself in limited circumstances. Allowing you to contribute extra towards your preferred accommodation.
It's important to get financial advice before agreeing to pay top-up fees and consider how price increases or changes in circumstances might impact the ability to pay.
Third party top-ups
If you choose a care home which charges a higher fee than we would normally agree to pay. Then another person or organisation, other than yourself, will have to meet the difference. This is known as a ‘third party top-up’.
This can be done if you have someone else who is willing and able to pay the extra amount on your behalf.
You might want to use a third party top up to pay for more expensive accommodation that:
- is near family or friends
- has a room that is larger or has a nicer view
- is where you feel most comfortable
Please make sure if someone is agreeing to do this on your behalf, that the funds are available to meet this top-up for the foreseeable future. Otherwise your stay at that care home may be in danger if these additional payments are not maintained.
First party top-ups
First-party top-ups payments can be made by a care resident (not a third party) to cover the difference between the council's funded rate and a more expensive chosen home.
You can only make your own top-up payments in the following specific situations :
- when you first move into a care home and your property in subject to the 12-week disregard.
- when you have a deferred payment agreement in place.
- if your care home place is provided as 'after-care' under section 117 of the Mental Health Act 1983.
- if you are exempt from charges because you contracted CJD
What happens if payment of the top-up fee stops
If the person paying your top up (a first or third party) can no longer afford to make these payments they must let us and the care home know right away.
If this happens, we will reassess your care needs and look at the options available. Depending on the outcome, you may need to:
- move to another room in the care home
- move to another care home with fees that are within your budget
- undergo a review of your personal budget if the only accommodation that can meet your needs is above our expected costs