Funding your Care: Means Tests and Financial Assessments
07 December 2020
Are you wondering how you are going to fund your own or a loved-one's care? Or maybe you have had a needs assessment and are now planning for a means test? If someone has a low income or needs financial support to fund their care, they are entitled to receive money from their local council.
In this article, we are going to tell you all about what a means test is, how it works, and how to prepare for a financial assessment. We will also look at how to avoid ‘deprivation of assets’.
What is a means test?
A means test, also called a financial assessment, is an assessment of whether a council should pay for someone’s care. It is based on how much money a person has (their means), and how much care they can afford. In England, a council will usually pay for someone’s care if they have less than £23,250 in savings. If the council agrees to pay for some or all of a person’s care costs, they will receive a personal budget.
When should I get a means test?
A financial assessment takes place after a needs assessment or a carer’s assessment. You do not need to apply for a financial assessment, instead you need to first get a care needs assessment. This assessment decides what a person’s care and support plan should look like. If after a means test someone is given a personal budget, their finances will be reassessed every year.
What is included in a means test?
In a means test, the local council looks at a person's financial information. This is how the local council calculates how much money they should put towards a person’s care, or if they should pay for any alterations to a person’s home (e.g., installing a stair lift). During a means test, a Financial Assessment Officer from the council visits someone at home and asks about the following financial information:
· Property (also second homes and properties that are not in the UK)
· Benefits (Attendance Allowance or PIP)
During the financial assessment, a person will not be asked about possessions or life insurance.
If you share savings with someone else, a means test will assume that you own half of those savings. If someone’s spouse or partner has their own savings, these won’t be taken into account in a means test.
NOTE: It is important that people do not try to reduce any of their finances before the assessment. If someone spends their money or gives away property before the financial assessment, a person will experience ‘deprivation of assets’ as the assessment will take into account money and property a person used to own and the assets a person tried to reduce will still count.
What's the difference between an at-home care means test and a care home means test?
There are 2 main differences in the way a person’s financial assessment works if they receive care at home, as opposed to a residential care home.
Firstly, if someone receives at-home care (if a carer needs to go to their home for care), then the value of a person’s house won’t count in their means test. The value of someone’s house will count if they are going into a care home unless:
· Their spouse or partner lives in the home
· A close relative who is 60 or over lives in the home
· A close relative who is younger than 16 lives in the home
· An ex-spouse or ex-partner lives in the home and they are a single parent.
Secondly, if someone receives at-home care then they are allowed to keep more of their income to pay for bills and to live on, meaning that during the financial assessment their income figures can be higher.
How to prepare for a means test
You can prepare for a financial assessment by making sure you have all of the information you will need. Make sure you have the following information about your financial situation ready for the means test:
· Savings (bank accounts, building societies, ISAs, premium bonds)
· Stocks and shares
You can also keep a diary of your care needs and disability-related expenses ready to talk about during the assessment.
Take someone you trust to the assessment with you for support and to give you confidence. You can also call the helplines listed at the bottom of this page for confidential, personalised advice.
Make sure you are receiving all of the benefits you are entitled to before a means test as the financial assessment will assume you are receiving all the benefits you are entitled to, even if you have not applied for them yet.
What is deprivation of assets?
Deprivation of assets is when a person tried to reduce their assets on purpose so that they won’t count in a means test. This could include money, income or property. If someone gives away money to stop it from counting in their means test (trying to get funding for care from the council), the council may still include the value of the money or assets they don’t have any more in their financial assessment. The following actions count as methods of reducing a person’s assets:
· Giving away money
· Giving the title deeds of a property to someone
· Spending lots of money, more than usual
· Gambling money away
· Transferring savings so that a spouse or partner owns the money.
· Spending savings on possessions that would be excluded from a means test.
How does the council decide if there has been a deliberate deprivation of assets?
If a council suspects that someone may have gotten rid of money or assets to reduce their financial figures in a means test, they will consider two things to confirm whether it counts as deprivation of assets:
· Someone knew they might need or needed care and support when they got rid of their property or money. (the timing and knowing about care needs)
· Someone got rid of their home or reduced their savings mainly in order to avoid paying for care. (your reason for getting rid of assets)
How to avoid deprivation of assets
It is important to avoid deprivation of assets so you receive the right amount of money and support for your care or the care of a loved one. When you find out you will need care, and you are planning for a means test:
· Do not try to spend savings
· Do not give away money or property to reduce your assets
· Do not try to reduce your income
· Do not spend your savings on possessions so they won’t count in a means test.
· Do not intentionally try to reduce your assets.
If you need more support about deprivation of assets you can visit the Age UK website or call their helpline – 0800 678 1602.
Can I appeal the results of a means test?
Yes, you can appeal the results of a means test. If you don’t agree with the results of a financial assessment or the way it was carried out you should:
· Complain to your local council (on their website or over the phone).
· Complain to the local government and social care ombudsman (someone who has been employed to investigate complaints about organisations).
Support for financial assessments
If you are worried about a means test or deprivation of assets, and you want to find out more, there are services that offer advice and support:
· FirstStopAdvice give advice about means tests, you can call their helpline – 0800 377 7070
· The Society of Later Life Advisers (SOLLA) can help you with a financial assessment, you can call their helpline – 0333 2020 454
· The Money Advice Service offer support to anyone about financial assessments, you can call them on 0800 138 7777