How we work out what you can afford

Service status

The Deferred Payments page is currently being updated and will be back online again soon. For information and advice please call 020 8068 7640 or email.

Sometimes a care home can offer you more safety and independence than staying at home. We know people worry about the costs, but we’ll always make sure you have money to live on.

How we work out what you can afford

We base this on your capital, which is money you have in savings, investments and so on. It can sometimes include the value of your property (there’s more detail on that below ).

If you have £14,250 or less put-away, we won’t charge you anything from your savings for your care (but if you own your house, we might take this into account later). If you have more than £23,250 in savings, you’ll have to pay the full cost of your care. 

If you share your capital with a partner, we’ll assume you are entitled to half of anything in those accounts, unless you give us legal evidence that proves you don’t. We won’t take any of their separate income or capital into account.

If you have more than £14,250 but less than £23,250, we’ll calculate how much you can afford based on £1 a week for every £250 (or part of £250) you have in capital.

For example:

  • say you have £18,000 saved. Since we ignore the first £14,250, we’ll count that as £3,750 saved
  • for each £250 (or part of £250) of that, we’ll count £1 a week. So for £3,750, we’ll treat you as if you could pay £15 a week from your capital

Will I have to sell my home?

We’ll usually take the value of any property you own into account when we work out what you can afford. But we won’t include it if any of these are true:

  • you have a partner who lives there
  • you’re responsible for a child under 18 who lives there
  • you’re responsible for a relative who’s ill or disabled and lives there
  • there’s another member of your family living there who is over 60

There are a few other circumstances where we might not, but these are unusual.

We don’t want you to make any hasty decisions, so we don’t include the value of your home in our calculations for the first 12 weeks that you’re in a care home That gives you time to think about what you want to do, and whether you can afford your payments without selling it.

You should know that if you try to transfer your homeownership to someone else to avoid selling, we can still take the value of it into account. And if we have evidence that you gave away your assets to try and avoid paying for care, you could even be taken to court.

You will keep some allowances

As well as the savings allowance, we make sure you keep the personal allowance the Department of Work and Pensions has set. That is £28.25 a week at the moment.

You might also keep some of your benefits and pensions. But if you are already receiving benefits, some of them could be affected. 

What if I want to go somewhere more expensive?

You decide which home you go to, and some are more expensive than others. We’ll tell you what the maximum amount we can pay is. If someone else offers to cover a gap in the fees, we’ll consider making an agreement with them to do that. But we’ll have to be sure they know what they’re agreeing to, and they’ll have to sign an indemnity and show they can afford to pay. Otherwise, you’ll need to find a home that we’re able to pay for.

You’ll pay the care home directly

They usually accept payment online, by Direct Debit, by telephone or by cheque. If you don’t pay on time, they can charge interest. They might also charge interest on back payments if you’re deferring payment until after you’ve sold your home.

What happens to my benefits?

  • if you’re over 60 and contributing to the cost of your care, you should apply for Pension Credit
  • if you’re under 60 and contributing to the cost of your care, you should apply for Income Support
  • if you don’t pay the full cost of your care, you’ll only be entitled to Attendance Allowance and the care component of the Disability Living Allowance for the first four weeks of your stay in the care home. That also applies to Constant Attendance Allowance, Exceptionally Severe Disability Allowance (from an accident at work), Disablement Benefit and War Disablement Pension
  • if you’re living in a care home and receive Attendance Allowance and Disability Living Allowance but have agreed in writing to sell your house, you can get a Deferred Payment Agreement. That means that you’ll pay back your fees at the end of the exempt period and won’t be entitled to Income Support

It’s your responsibility (or your representative’s) to let the Benefits Agency and Pension Service know you’re moving into a care home so they can change your benefits.

You can ask us to review your assessment if you disagree or can’t pay

You’ll need to write to us at explaining why you think our charges should be different. You should include any evidence you need us to look at. We’ll write back to you with our answer.

If you’re still not happy, you can appeal. And if your appeal is rejected but you still think you’re being wrongly charged, you can refer your case to the Local Government and Social Care Ombudsman. 

Throughout the reviews and appeals, the care home will charge you as normal. If we find we made a mistake, we’ll refund you.