When long-term care becomes necessary, families are often confronted with a fundamental question: should care be funded by the council, or must it be paid for privately? Beyond the immediate cost implications, this decision has lasting consequences for personal assets, property, and future inheritance.
Understanding how each funding route works—and how assets are treated under the rules—allows families to navigate care decisions with clarity rather than uncertainty.
How Care Funding Is Decided in the UK
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Access to council-funded care depends on a financial assessment, commonly referred to as a means test. This assessment evaluates income and capital to determine whether an individual qualifies for financial support.
If capital exceeds the upper threshold (currently £23,250 in England), the individual is generally expected to self-fund. Below this level, the council may contribute, although income is still taken into account.
Assets play a central role in determining which funding route applies.
What Counts as an Asset in Care Funding?
Assets are broadly defined and include more than just savings. While some items are protected, others can significantly affect eligibility for council support.
| Type of Asset | Included in Assessment? | How It Affects Funding |
|---|---|---|
| Savings and investments | Yes | Used to determine whether care is self-funded. |
| Property (with no qualifying occupant) | Yes | May push the individual above the funding threshold. |
| State and private pensions | Yes | Income is assessed for ongoing contributions. |
| Personal belongings | No | Excluded from the means test. |
Council-Funded Care: How Assets Are Treated
When the council contributes to care costs, it does not do so without limits. Individuals are usually required to contribute most of their income, while retaining a small personal allowance.
Capital below the lower threshold is protected, and certain assets—such as a home occupied by a spouse or qualifying relative—must be disregarded entirely.
Council-funded care offers financial protection, but it also comes with structured assessments and ongoing reviews.
Self-Funding Care: Greater Flexibility, Higher Exposure
Self-funding applies when assets exceed the upper threshold. Individuals in this position pay the full cost of their care directly.
While this exposes assets to higher outgoings, it also offers flexibility. Self-funders often have more control over care arrangements and timing, and they are not subject to the same contribution calculations.
Importantly, once assets reduce below the threshold, individuals can request reassessment for council support.
Property and the 12-Week Disregard
When a person moves into permanent care, the value of their home is disregarded for the first 12 weeks. This mandatory period applies regardless of funding route and allows families time to make informed decisions.
After this period, if no qualifying person lives in the property, it may be included in the assessment whether care is council-funded or self-funded.
Deferred Payment Arrangements: A Middle Ground
For individuals whose primary asset is their home, a deferred payment arrangement can bridge the gap between council funding and self-funding.
Under this arrangement, care costs are temporarily covered and recovered later from the estate. This avoids immediate property sale and often preserves greater asset value over time.
Long-Term Impact on Assets and Inheritance
The key difference between council-funded care and self-funding lies not in care quality, but in how assets are consumed over time.
Self-funding typically results in faster asset depletion, while council-funded care offers protection for those with lower capital. However, both routes operate within clear legal boundaries designed to balance individual responsibility with public support.
Understanding these dynamics early can prevent unnecessary financial strain.
FAQ – Council-Funded Care vs Self-Funding
What determines whether care is council-funded or self-funded?
The outcome of the financial means test, based on income and capital.
Does self-funding mean no council involvement?
No. Councils still assess needs and can step in when assets fall below the threshold.
Can property be excluded from care assessments?
Yes, in specific circumstances, such as when a qualifying relative lives there.
Is council-funded care free?
No. Most individuals still contribute from their income.
Can funding status change over time?
Yes. Reassessment is possible as assets reduce.
Need help finding a care home?
Senior Home Plus offers free personalized guidance to help you find a care facility that suits your health needs, budget, and preferred location in the UK.
Call us at 0203 608 0055 to get expert assistance today.
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