For adults living with disabilities or chronic illnesses, 24/7 care at home is the key to a fulfilling life. Live in care allows a person to enjoy independence, pursue an enriching social life, and work toward personal goals.
Unfortunately, many people are faced with financial complications when searching for care solutions. They either struggle to afford the level of support they need or don’t understand the options available to them.
If this is a problem for you or a family member, keep reading. We’re breaking down how to pay for live in care so you can make smart decisions and get the support you need to improve your quality of life.
Knowing how to pay for live in care starts with planning
Before you begin looking for self-funding options, it’s important to have a clear understanding of your finances. This will help when it’s time to decide how to pay for live in care.
Review and write down all your financial assets, including checking accounts, savings, and investments. Also, consider money coming in from pensions or other income sources.
After you’ve reviewed your finances, it helps to get a sense of how much your care will cost. Depending on your needs, care at home could cost up to £2,000 a week.
But don’t let that scare you. There are ways you can get financial assistance.
Funding from the local authority
When exploring how to pay for live in care on your own, start with your local council. You may be entitled to financial assistance that could provide you with the life-changing support you need.
Eligibility for assistance depends on a few things, such as your financial status and the type of care you require. Currently, if you have less than £23, 250 in savings, you may be eligible.
Here are the steps involved in getting approved:
- Your council conducts a free needs assessment to determine if you require care and how much you need.
- If they find that you need support at home, they conduct a means test to determine how much the council pays and how much you pay toward your care.
- If you’re approved for funding, the council creates a care plan and budget.
- You get the option of receiving funding through direct deposits or having the funds sent to your care provider.
If you feel you’re eligible for funding through your local authority, you can apply for a needs assessment through the NHS.
A home reversion plan
If you don’t qualify for funding through your local authority, you may consider a home reversion plan. This type of equity release involves using the value of your home to get the money you need to self-fund your care.
Here’s how it works:
- A home reversion provider buys a percentage of your home’s equity.
- You get to remain in your home for the remainder of your life without paying rent.
- The money for your home equity is paid out as a lump sum or multiple payments, whichever you choose.
- The home reversion provider you work with owns a share of your property. If you sell your home, they get a percentage of the revenue.
A home reversion plan comes with several advantages. One of the most attractive features is that you get to remain in your home without making payments on the equity you sold. In addition, because you only sell a fraction of your home’s value, you maintain partial ownership.
When deciding how to pay for live in care, keep in mind that this approach provides immediate cash. This means you can get the support you need right away while maintaining financial security.
Lifetime mortgage
This is another type of equity release that allows you to use the value of your home to get money to self-fund your care at home. However, this approach is much different from a home reversion plan.
A lifetime mortgage involves borrowing money against your home equity by taking out a new loan. This loan is repaid when your home is sold or if you enter a long-term care facility.
Unlike a home reversion plan where someone buys a portion of your property, a lifetime mortgage allows you to maintain full ownership. However, interest on the loan accumulates over time – something you’ll need to consider before moving forward.
Other benefit schemes to consider
If the funding strategies discussed above won’t work for you, there are other options that may provide you with financial relief. Here’s a breakdown of the most common:
- Attendance Allowance – This is only for individuals over the state pension age of 66. It provides extra financial support if you suffer from a disability or illness that requires live in care. Attendance Allowance doesn’t require a means test and payments are either £72.65 or £108.55 per week depending on the type of care you need.
- Continuing Healthcare (CHC) - If you suffer from complex issues that require long-term care, you may be eligible for this free assistance from the NHS. To qualify for CHC, you’ll need to be assessed by healthcare professionals who will determine the level of care you require.
- Personal Independent Payment (PIP) - A little extra help with daily living expenses can go a long way. PIP provides this if you suffer from a chronic illness or a disability that affects your mobility. Currently, you could qualify for daily living assistance of £68.10 or £101.75 per week OR mobility assistance of either £26.90 or £71.00 per week. These rates depend on the level of support you need.
While these schemes won’t cover the full cost of 24/7 care, they certainly help. If you receive care from a friend or family member, they may also be able to get Carer’s Allowance to help with their expenses.
Funding your own live in care shouldn’t be a headache
At Noble, we understand the stress individuals and families experience when figuring out how to pay for live in care. Our team will help by giving you impartial advice and pointing you in the right direction.
We’re affiliates of the Society of Later Life Advisers (SOLLA), a not-for-profit organisation dedicated to higher standards and accessibility to regulated financial advice for older people and their families.
Contact us today to learn more.