Statistically we are living longer than ever before. More and more of us are forced to consider the possibility of living in a care home and somehow the care home must be paid for. Increasingly, the general public is being made aware of the issue through media coverage. In some of these cases it seems that people have been forced to pay for care when it later transpires that government should have been paying.

It is important to distinguish between the different types of care home available. They fall within three categories:

1. Residential Care Home – this is where there is no special medical need and is for people who are no longer able to manage living at home – often as a result of reduced mobility. There may be an occasional need for nursing assistance, which can be met by regular nursing visits.
2. Nursing Care Home – these distinguish themselves from residential care homes by having a registered nurse on staff at all times. Residents at nursing care homes tend to have a need for medication to be administered by a registered nurse, and generally tend to have greater medical needs than those who live at a residential care home. :
3. EMI Home – this stands for “Elderly Mentally Ill” and there are relatively few of these homes. They specialise in looking after elderly people with more severe difficulties such as advanced dementia and sometimes schizophrenia.

It is important to make the above distinctions because each serves a different purpose. Sometimes a resident’s needs become too much for a residential care home to be able to properly cater for that resident and it may become necessary to move him to a more suitable, medically supervised home. The distinction is also important when it comes to funding care.

NHS Continuing Care

Recent press coverage over the case of a Mrs Grogan has made people much more aware of the possibility that the NHS might be obliged to cover the full cost of care. However, this is only in cases where the resident’s primary need is medical and would essentially otherwise need hospital supervision. Nonetheless, this assistance is rarely volunteered, and sometimes residents pay their own care costs when they could claim the full cost of care from the NHS, simply because they were never made aware of their entitlement. Put simply, financial assistance was never offered and never claimed. It is important to note that NHS funding is not means tested, which means that even if paying the cost of care (between £600-800 per week) is within the resident’s financial means, they might still be eligible for free NHS funding.

The first step in organising any financial assistance is to arrange a joint assessment by social services and the local NHS Primary Care Trust (PCT), who are able to then assess the resident based on a number of criteria. Each PCT has slightly different criteria based on central government guidelines. The criteria are not generous and the writer understands that the Department of Health guidelines are currently being revised in the light of the recent Grogan case, where the criteria were successfully challenged as being unlawful.

It follows, therefore, that a resident might still be eligible for NHS funding even if this is refused in the first instance, based on the criteria. However, challenging such an assessment can require determination and stamina.

Other assistance

Even if the resident’s primary need is not healthcare, and he is therefore rightfully refused NHS funding, he might still be entitled to other non means-tested benefits such as Registered Nursing Care Contributions of between £40 and £133 per week, depending on the severity of the condition and the need for regular medical attention. Similarly, Disability Living Allowance or Attendance Allowance, which are also not means-tested may be available. If these are not claimed, it means that a patient is missing out on financial assistance he is entitled to on the basis of his physical or medical need.

Means-tested Local Authority Funding

Even if a resident is not entitled to any of the above, but is unable to live at home, then he would be in residential care on the basis that they would fund their own fees. Even this is not as simple as it seems, as depending on who placed the resident in the home, the responsibility for fees can very. For example a resident who places himself in the home would have a contract with the care home. In contrast, a resident placed in the home by social services has no direct financial relationship with the home. The local authority should pay and recover the cost from the patient. Ultimately, however, the cost would still need to be met by the resident as long as he can afford it. Incidentally, there are rules governing deliberate deprivation of assets by a person with a view to avoiding paying for care home fees in future. In essence, the council will ignore such gifts and treat the resident as still owning the asset given away. Therefore any gifts which are being considered from the resident’s assets need specialist advice.

Perhaps more importantly, once the resident’s capital resources (excluding certain assets, which may include personal effects, certain interests in trusts and the resident’s home in some circumstances) are reduced to £21,000, the local authority is obliged to meet some of the cost of funding, until the capital is further reduced to £12,750, at which stage the local authority is obliged to meet the full cost of funding (subject to financial contribution from the client’s income if it exceeds £19.60 per week). It is important not only to ensure that an application for funding is made in time, but also to include only assets which are relevant for means testing purposes. Appropriate professional advice can therefore be essential in ensuring that the local authority do not “forget” to disregard irrelevant assets on financial assessment.

Other means tested benefits

Consideration should also be given to claiming pension credit, council tax benefit and any other means tested benefits that might be relevant to the resident.

Assistance under the Mental Health Act 1983

Where a patient is mentally incapable and has become a danger to himself or others, the relevant authority (generally social services, police or the NHS) may detain him under the provisions of the Mental Health Act 1983 for as long as strictly necessary. This is often referred to as being “sectioned” (i.e. detained under section 2 or section 3 of the Act). This is not a step which is taken lightly (two doctors are required to approve of the detention) and because of the severity of the events or condition leading to the patient being sectioned, it is important to ensure that they receive appropriate aftercare to meet all their various needs. This is called “section 117 aftercare” (named after the relevant provision in the Mental Health Act) and includes appropriate medical and psychiatric support as well as providing somewhere appropriate to live. In the case of older people this tends to be in an EMI home, as the staff and management at such homes tend to have the right experience and training to deal with the complex needs involved.

This is directly relevant to funding issues because aftercare provided after detention is free, including the cost of appropriate residential accommodation, as long as the patient remains under “section 117” aftercare. The local PCT and the Local Authority between them have a joint liability in this regard. This means that if a resident is placed in an EMI home as part of the aftercare this should not be charged to the patient. The only exception to this is where there are two places available and the patient (or his attorney(s) or receiver) prefers the more expensive of the two. In this case a top-up for the difference in cost between the two placements would be normal.

Section 117 funding is, however, reviewed on a regular basis and if the patient no longer requires aftercare because his condition has stabilised or improved, it can be appropriate for funding to be withdrawn.

Summary

In the majority of cases where a person needs to be placed in a care home they are required to pay the cost themselves unless:

• Healthcare is the primary need; or
• Placement in a care home follows confinement under the Mental Health Act; or
• The Resident has “relevant” capital of £21,000 or under

The issues raised in this article are particularly relevant not only to clients and their families, but also where there is an Enduring Power of Attorney in place. An attorney is obliged to act in the best interests of the resident and must therefore make sure that all benefits (means tested or otherwise) have been claimed where appropriate.

It is important for residents to make an Enduring Power of Attorney before entering into a care home, to ensure that there is someone in place who can step in and deal with the resident’s financial affairs if necessary. Further discussion on mental incapacity and powers of attorney is outside the scope of this article but further information is available on our website and we are happy to advise you.

Finally, the information in this article is of a general nature only and professional guidance should be sought before applying these to your particular facts. If you require advice on any of the issues raised above please do not hesitate to contact a member of our private client team to discuss your circumstances and how we can help.