Home/Members/Knowledge Bank/Complete Care Adviser 2020/21/Section C - Local Authority Funding

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The Care Act 2014 is a reformed the legal framework for health and social care it is supported by the Care and

Support Regulations and Statutory Guidance and came into force throughout England from April 2015.


The Coronavirus Act 2020Guidance and Discharge to Assess pathways may impact on care assessment and

funding by a Local Authority or Clinical Commissioning Group as it intends to enable Local Authorities and

Clinical Commissioning Groups to prioritise resources, and if necessary, change the way they work should they be

unable to meet their statutory duties in full because of an increase in demand, or reduced staffing resources due

to the Covid-19 pandemic.


The Care Act 2014 is included:

  • Universal information and advice, (including financial)

  • National assessment and eligibility criteria for care and support needs

  • Deferred Payment Agreements

  • Additional rights for carers

  • New rights for prisoners


Funding Adult Social Care is subject to further reform based on 7 key principles.

Some of the likely considerations for ASC charging review may be:

  • A previously proposed ‘cap’ on care fees

  • Taxation

  • Further integration of Health and Social Care

  • A charging ceiling and extended means test

  • Property disregard changes

  • Social Care insurance schemes and more extensive use of Deferred Payment Agreements.


The Local Authority won’t charge for:


  • Giving information or advice

  • Assessing care and support needs

  • Arranging community care services

  • Occupational Therapy assessment

  • Equipment and minor adaptations (up to £1000)

  • After care services provided under Section 117 of the Mental Health Act 1983

  • Any Non-Residential Services required by individuals suffering from Creutzfeldt Jacob Disease

  • Re-ablement services (for up to 6 weeks) to help you stay independent

Care needs and Carers assessment

Local Authorities must undertake an assessment for any adult with an appearance of need for care and support, regardless of whether the local authority thinks they have eligible needs or of their financial situation.


The purpose of an assessment is to identify the person’s needs and how these impact on their wellbeing, and the outcomes that the person wishes to achieve in their day-to-day life.




  • A service and/or financial contribution provided by the Local Authority is subject to an assessment of need for social care. Whether that is for someone with care needs and/or for the person or people who are caring for them

  • A care needs assessment is irrespective of how the care is paid for and done before a financial assessmen

  • ‘Social Services’ isn’t just about arranging for a carer or a placement in a care home.


Most people want to stay at home for as long as possible, both the NHS and Local Authority provide support services, some of which are free and vary from information and advice to an occupational therapist assessment which looks at how they could help with aids and adaptations to the home for example grab rails, ramps or even a walk-in shower. Services may include- hot meal provision or help with laundry, pendant alarms, and other assistive technology.




Care needs assessment

During the assessment, local authorities must consider all the adult’s care and support needs, regardless of any support being provided by a carer. Where the adult has a carer, information on the care that they are providing can be captured during assessment, but it must not influence the eligibility decision.

The local authority is not required to meet any needs which are being met by a carer who is willing and able to do so, but it should record where that is the case.

The eligibility threshold for adults with care and support needs is set out in the Care and Support (Eligibility Criteria) Regulations 2014.  The threshold is based on identifying how a person’s needs affect their ability to achieve relevant outcomes, and how this impacts on their wellbeing.

While considering whether an adult with care and support needs has eligible needs, local authorities must consider whether:

  • The adult’s needs arise from or are related to a physical or mental impairment or illness.

  • Because of the adult’s needs the adult is unable to achieve two or more of the specified outcomes

  • Because of being unable to achieve these outcomes there is, or there is likely to be, a significant impact on the adult’s wellbeing.


How long will it take?

There is no set time limit and urgent/crisis cases will be prioritised.

Who does it?

The assessment is not always done face to face, an initial contact assessment may be done over the phone or you may prefer to do a self-assessment questionnaire via the internet or send in a paper copy.

What is important is that it is done in a proportionate way and that you can fully take part, if this is not the case and you do not have someone to help the Local Authority may arrange someone for you, known as an independent advocate.


Who can be there?

You can have anyone you wish present at a face to face assessment which is usually done by a one or occasionally two workers (not all members of a social care team are qualified social workers but they are all assessing a care need against the national criteria).

The assessment and any other relevant information will be recorded and authorised, if you want a copy and don’t receive it automatically, ask for one as you have the right to change or dispute what, if anything, you don’t agree with.


Remember if you have not been assessed with an eligible care need NO financial contribution may be made by the Local Authority towards the cost of care


Charging Assessment 

In all cases, a local authority has the discretion to choose whether to charge following a person’s care needs assessment. Where it decides to charge, it must follow the Care and Support (Charging and Assessment of Resources) regulations and have regard to the statutory guidance.


Only once assessed with an eligible care need will a financial assessment determine any client contribution.


Personal Budget 

The care and support planning process will determine what type of care and accommodation will best suit the person’s needs.

As part of that, the local authority must provide the person with a personal budget. The personal budget is defined as the cost to the local authority of meeting the person’s needs which the local authority chooses or is required to meet


Remember it is an individual’s care need being assessed and so an individual’s ability to contribute towards the cost that will be financially assessed, any joint savings will be halved.


The detail of how to charge is different depending on whether someone is receiving care in a care home, or their own home, or another setting. However, they share some common elements.


Financial Assessment – common elements

The following rules apply to financial assessment for both residential care and care at home;


  • Residents with over £23,250 savings/capital will meet the full costs of their care and are considered able to pay for their own care in full - self funding.

  • Residents with between £14,250 and £23,250 will contribute from their savings/capital as a tariff income of £1.00 for every £250 or part of, a contribution from income will also be assess

  • Residents with Savings/Capital below £14,250 will not contribute from capital, but a contribution from income will be assessed

Care at home

Because a person who receives care and support outside a care home will need to pay their daily living costs charging rules ensure they have enough money to meet these costs.


For care at home, after charging a person must be left with the appropriate minimum income guarantee (MIG)


In addition, where a person receives benefits to meet their disability needs that do not meet the eligibility criteria for local authority care and support, the charging arrangements should ensure that they keep enough money to cover the cost of meeting these Disability-Related Expenses (DRE)


Light Touch Financial assessments

In some circumstances, a local authority may choose to treat a person as if a financial assessment had been carried out. The local authority must be satisfied based on evidence provided by the person that they can afford, and will continue to be able to afford, any charges due. This is known as a “light-touch” financial assessment.


Deliberate Deprivation

If you give away an asset or do not claim an income or benefit entitlement available to you and the Local Authority and/or DWP decide that this was done with a deliberate intention to avoid paying for your care/ accommodation costs or to access or increase a benefit entitlement then they may treat you as still owning or having it and the financial assessment will include the amount as notional income/capital.


Notional Income/Capital

If you are found to have intentionally deprived or decreased assets to reduce the amount that you are charged towards the cost of care it may be treated as a ‘notional’ amount. This may also apply to income.


The Local Authority or benefit agency assess as if you still have it and add it to the actual capital or income that you have.


If the notional capital comes to more than £23,250, the local authority may assess you as being able to meet the full cost of your care, even though your actual capital is less than the upper limit.

Debt recovery

The Care Act 2014 enables a local authority to make a claim to the County Court to recover a debt that may have accrued due to a local authority meeting a person’s eligible care and support needs.

Local authorities should also bear in mind that they are bound by the public law principle of acting reasonably at all times and must act in accordance with human rights legislation, as well as the wellbeing principle set out in the Care Act.

 Given this, a local authority will wish to consider all other reasonable avenues before utilising the powers provided under the Act, including the offer of a deferred payment agreement, (wherever the person could be offered one), and can only make an application to the court should this be refused.


Where the person has transferred an asset to a third party to avoid the charge, the third party is liable to pay the local authority the difference between what it would have charged and did charge the person receiving care. However, the third party is not liable to pay anything which exceeds the benefit they have received from the transfer.


The local authority can use the County Court process to recover debts, but this should only be used after other avenues have been exhausted.


There may be other options and implications to disposal of property. Seek legal and/or financial advice.


Ordinary Residence

Ordinary residence is the place the person has voluntarily adopted for a settled purpose, whether for a short or long duration and irrespective of whether they own, or have an interest in a property in another local authority area. There is no minimum period in which a person has to be living in a particular place for them to be considered ordinarily resident there.

For adults with care and support needs, the local authority in which the adult is ordinarily resident will be responsible for meeting their eligible needs. For carers, however, the responsible local authority will be the one where the adult for whom they care is ordinarily resident.


In leading case law; Shah V London Borough of Barnet (1983), Lord Scarman described ordinary residence as referring to:

…a man’s abode in a particular place or country which he has adopted voluntarily and for settled purposes as part of the regular order of his life for the time being, whether of a short or long period

Complaints and compliments

You have the right to complain about any aspect of the local authority’s provision that you are unhappy with, including the assessment process.


If having followed this procedure you are still not happy it can be taken to the Local Government Ombudsman.

The Local Government Ombudsman,

PO Box 4771, Coventry, CV4 0EH

Advice Team: 0300 061 0614


You may want to contact your local councillor, MP, and/or the Care Quality Commission (CQC) which is the body responsible for regulating and maintaining standards in health and adult social care in England.


In the same way, you may also compliment adult social care services or staff, a kind word makes a big difference and gives a lift to the whole team, if possible and appropriate please take the time to do this if you are happy with the services you have had arranged or receive through the Local Authority.


An independent appeal process is under consultation and planned for April 2020.



The cost of care can vary from one part of the country to another, from one county to the next, within one

area or even the same home.


Often this is due to the variation in amount or type of care, individual needs or the size, type, aspect of a

room but it may also be dependent on who is buying the bed - the Local Authority may pay less for a bed

in a home than a privately funded resident. Beds may have a set cost or be negotiated one at a time with

the cost depending greatly on area, demand, and availability.



The Local Authority must be able to provide for the care that they have assessed as eligible and they

may do this in different ways.

Some Councils own and run their own ‘care and/or nursing homes’, many have sold the larger bedded

properties over the years, some may still own smaller ones although often these are for younger adults

or those with specialist needs.


Many Local Authorities buy beds with one or several providers, these usually have an agreed

cost and may be referred to as ‘block beds’. The Local Authority may also have arrangements for

managing emergency and safeguarding cases or ‘step down’ provision to help with hospital discharge or

use the Discharge to Assess pathway to provide care while assessing ongoing needs. Councils may also

buy one bed at a time in a home and these may also be available to private residents.


Local Authority contribution

Each case should be assessed on a person’s care needs but for permanent care it is common for a

maximum amount to apply for older adults because the need can often be met appropriately in a permanent placement.

REMEMBER the Local Authority won’t pay anything towards a care cost has NOT been assessed as appropriate against the national criteria (or if the person would have met the eligibility criteria had they done so) – this is assessed against national criteria and this may not be the same as yours. This will also be necessary for an amount going towards core eligible care counted towards a lifetime cap on care from April 2020…


Self- Funders

Who is a ‘self-funder’? This isn’t always easy to assess as there are many income, savings, and capital disregards during the financial assessment. Property is not always considered and some discretionary decisions may affect a financial assessment.


For someone with funds over £23,250 (remember to halve joint savings and bear in mind that this does not necessarily include your home depending on who is living in it) then you are considered able to pay for your own care.

Depleting/reducing funds

What if you have moved into a care or nursing home funding your own care and the money is runs out?


People don’t move into a care home expecting to outlive our financial resources but we often underestimate our longevity and this happens to around 25% of people paying for their own care. It is worth considering requesting an assessment of care needs, and getting advice as ensuring appropriate, affordable care is chosen at the outset may avoid a need for a move in the future.


Check eligibility for NHS Continuing Healthcare and consider an assessment from the Local Authority if you are moving into a care or nursing home, even if you think you will be funding this yourself as the Local Authority may be able to provide advice, assess, arrange, and/ or negotiate appropriate care, maximise benefit entitlement and provide access to financial and legal advice.


How much will I have to pay?


Client Contribution

An assessed client contribution is charged from the date of admission into permanent care irrespective of whether someone owns a property or not.

Remember it is an individual care need that has been assessed and so an individual’s ability to pay towards the cost. Any joint savings will be halved


  • Savings over £23,250 the resident will pay for the whole cost of care. Request an assessment from the Local Authority and get advice especially if funds are likely to reduce.

  • Savings between £23,250 and £14,250 will be given an ‘assumed or tariff’ income of £1 for every £250 or part of. There will be an assessed contribution from income.

  • Savings under £14,250 you won’t pay a contribution from savings but there will be an assessment for a contribution form income for permanent care 


Most income (including state and private pensions, although 50% of a private pension can be given to a spouse) will be included in the assessed client contribution. There are also disregards of income, savings and capital which are detailed and can be found in the Care and Support Statutory Guidance.


Personal Expenses Allowance

Residents retain a Personal Expenses Allowance (PEA) of £24.90 per week and will not be asked to put this towards the basic cost of care.


The PEA may be increased if there are additional costs for a spouse remaining at home and although discretionary may be worth making a request if appropriate. Consider means tested benefit entitlement for a partner or spouse now living alone at home.


For those who have agreed a Deferred Payment Agreement there is a disposable income allowance of up to £144 per week.


Choice of accommodation

The person must have the right to choose between different providers of that type of accommodation provided that:

  • The accommodation is suitable in relation to the person’s assessed needs;

  • To do so would not cost the local authority more than the amount specified in the adult’s personal budget for accommodation of that type;The accommodation is available; and

  • The provider of the accommodation is willing to enter a contract with the local authority to provide the care at the rate identified in the person’s personal budget on the local authority’s terms and conditions.


Third Party Top-ups – (NOT the resident)

The Local Authority cannot ask someone to pay a ‘top-up’ towards the cost of accommodation because of market inadequacies or commissioning failures and must ensure there is a genuine choice within a personal budget.


If no preference has been expressed and no suitable accommodation is available at the amount identified in a personal budget, the local authority must arrange care in a more expensive setting


In such circumstances, the local authority must not ask for the payment of a ‘top-up’ fee.


Only when a person has chosen a more expensive accommodation can a ‘top-up’ payment be sought.


First Party/Self Top-ups

The person whose needs are to be met by the accommodation may themselves choose to make a ‘top-up’ payment only in the following circumstances:

  • Where a property is subject to a 12-week property disregard

  • Where there is a deferred payment agreement in place with the local authority

  • Where someone is receiving, accommodation provided under S117 for mental health aftercare



If Grace moves into a residential home which costs £750 per week and the Local Authority can offer a choice of residential care which will meet the assessed need for £450 per week.


Presuming that she is not self-funding this care and Grace has expressed a preference for more expensive accommodation the Local Authority does not have to pay the full £750 per week if they can meet this need within her personal budget and that they can offer her a choice of accommodation.


If Grace chooses a bigger room, or a more expensive setting a sustainable top-up will be required to meet the shortfall, the difference between the personal budget and the actual cost of care, in this example the difference is £300.


If Grace pays an assessed contribution of £200 (as an example), the Local Authority will add £250 to make it up to the cost of care that they can provide of £450 per week.

(There are separate rules for property cases where residents may be able to make a ‘self-top up’)


What if there is no ‘third party’ top up? Presuming continuing health care does not apply and there is no one able to make up this difference then Grace may have to consider the Local Authority placement or request that the Local Authority reconsiders its decision or contribution. It may also be possible that a deferred payment agreement to be made, depending on any security offered, savings available and assessed care need.


Bernie has been assessed with a need for permanent residential care as he is no longer able to manage at home alone even with considerable care and support.


Bernie is a widower with an income of £300 per week, made up from a state pension and an occupational pension.

He has savings of £10’000 and does not own his sheltered housing flat.


The Local Authority have found Bernie a bed in a local residential home that can meet his care need and he is happy to move there. A bed is available that is contracted by the Council at a cost of (as an example) £450 per week


Bernie will be asked to contribute his income minus a Personal Allowance (£24.90) and a savings disregard (£5.75)


What would happen if Bernie did not want to move to this home but to one of his choosing that is more expensive?


Will the Local Authority pay the whole cost of care?




The Local Authority will make an assessed contribution to the home BUT will not necessarily pay the whole cost as Bernie has expressed a preference for more expensive accommodation, if the Council can offer him a choice that can meet the need for less.


Property disregards

Annex B - Care and Support Statutory Guidance


The value of the person’s main or only home must be disregarded:

  1. Where the person is receiving care in a setting that is not a care home;

  2. If the person’s stay in a care home is temporary and they:

    1. Intend to return to that property and that property is still available to them; or

    2. Are taking reasonable steps to dispose of the property to acquire another more suitable property to return to.


Permanent stay

Where the person no longer occupies the property but it is occupied in part or whole as their main or only home by any of the people listed below, the mandatory disregard only applies where the property has been continuously occupied since before the person went into a care home;

The person’s partner, former partner, or civil partner, except where they are estranged;

A lone parent who is the person’s estranged or divorced partner;

A relative of the person or member of the person’s family who is:

  • Aged 60 or over, or

  • Is a child of the resident aged under 18, or

  • Is incapacitated.

A key aim of the charging framework is to prevent people being forced to sell their home at a time of crisis.


12-week property disregard 

If a person’s main or only home is not otherwise disregarded, a twelve-week property disregard may apply for someone whose non-housing assets are below £23’250

  1. When they first enter a care home as a permanent resident; or

  2. When a property disregard other than the 12-week property disregard unexpectedly ends because the qualifying relative has died or moved into a care home.


The property does not have to be for sale and the aim is to provide a ‘breathing space’ to ensure someone moving into permanent care has time to settle in and that all concerned are happy with the care provision before adding financial strings to their property.


Discretion to disregard property

Where the LA considers it reasonable to do so, they can disregard the value of premises not already disregarded for example when there is a sudden, unexpected change in a person’s financial circumstances.

Local Authority’s will have to balance the use of this discretion with the need to ensure that residents with assets are not maintained at public expense.







Deferred Payment Agreements (DPA)

Deferred payment agreements have been around since 2001, but the Care Act highlighted these agreements and provides a framework for wider implementation to prevent people from having to sell their home in their lifetime to meet the cost of their care. Regulations specify when a Local Authority MUST offer a DPA and times when they MAY offer a DPA.


‘Required to’ offer a Deferred Payment Agreement - Regulation 2 of the Principal Regulations sets out the circumstances in which a local authority must offer a deferred payment agreement

Someone is eligible for and so must be offered a deferred payment agreement if they meet all three of the following criteria at the point of applying:

  • Anyone whose needs are to be met by the provision of care in a care home.

  • Anyone who has less than (or equal to) £23,250 in assets excluding the value of their home and

  • Anyone whose home is not disregarded for the purposes of the charging assessment


‘Permitted to’ offer a Deferred Payment Agreement - Regulation 3 of the Principal Regulations sets out the circumstances in which a local authority is permitted to enter into a deferred payment agreement.

Local authorities are also encouraged to offer the scheme more widely to anyone they feel would benefit who does not fully meet the criteria for example someone who has over the upper funding levels of £23’250.


Supported Living accommodation

They may also at their discretion enter deferred payment agreements with people whose care and support is provided in supported living accommodation (where the person intends to retain their former home and pay the associated care and accommodation rental costs from their deferred payment.

The Care and Support (Deferred Payment) (Amendment) Regulations 2017 From 5th Feb 2018 these Regulations amend the Care and Support (Deferred Payment) Regulations 2014 (“the Principal Regulations”) so that in the circumstances and subject to the conditions in the Principal Regulations, a LA is required, or permitted, to enter into a DPA with an adult who has finances above the financial limit (currently £23,250), if the authority considers that, it would have a duty to meet the adult’s needs under section 18 of the Care Act 2014 by the provision of accommodation.

Deferred payment agreements (DPAs) are made between a local authority (LA) and an adult. Under the agreements the authority agrees to defer either the payment of charges due to it from the adult, or a loan made to an adult to pay, for the costs of meeting needs by the provision of accommodation in a care home or supported living accommodation

Regulations 3 and 4 of these Regulations amend regulations 2(2) and 3(1) of the Principal Regulations so that a local authority may be required or permitted to enter into a deferred payment agreement in a case where a local authority is not meeting or going to meet the adult’s needs by the provision of accommodation in a care home, if the local authority considers that it would have been required to meet the adult’s needs under section 18 but for the fact that the adult’s financial resources exceed the financial limit.

DPA’s and Top-ups

At a minimum, when local authorities are required to offer a deferred payment agreement they must allow someone to defer their ‘core’ care costs.

In principle, people should be able to defer their full care costs including any top-ups, but to ensure sustainability of the deferral, local authorities have discretion over the amount people are permitted to top-up.


Local authorities should accept any top-up deemed to be reasonable given considerations of affordability, sustainability, and available equity.


Right to Refuse

A local authority may refuse to enter into a deferred payment agreement despite someone meeting the eligibility criteria:

  • Where a local authority is unable to secure a first charge on the person’s property

  • Where someone is seeking to pay a top up and/or

  • Where a person does not agree to the terms and conditions of the agreement, for example a requirement to insure and maintain the property.


Interest Rate %

From April 1st, 2015 interest is chargeable from the start of the agreement. The interest charged is based on the Gilt rate plus 0.15%. It is reviewed twice a year and applies from 1st Jan – 30th June and 1st July – 31st Dec each year.





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