If our assessment shows you have more capital than the upper limit (currently £29,750), you will not qualify for financial help from us.
This will not affect any entitlement you have to free personal care or nursing care. If you have more capital than the upper limit, you will have to pay your care home fees until your capital falls below the upper limit.
Once this happens, you will qualify for financial help from us.
What counts as capital?
Capital includes money held in:
- bank or building society accounts including current accounts
- cash
- investment bonds and investment accounts
- stocks and shares
- trust funds
- Premium Bonds
- National Savings Certificates;
- property
Whose capital do you take into account?
We only count the capital owned by the person going into care. If you have any joint capital, (for example, a joint bank account or investment with your husband, wife or partner) we will treat you as owning half of the capital or investment.
If you have a joint account with someone who is not your husband, wife or partner, we may need to see evidence of who owns the capital.
What will my care home fees be if my capital is above the upper limit for financial assistance?
If you are only receiving free personal care and nursing care payments from us to assist with your care home fees, you should always ask the home how much the fees would be. Some homes have different fees for people who are meeting the cost of the care home themselves. In these care homes, you will often have to pay a much higher amount than our 'approved rate', which is the most we will pay for a place in a care home.
It is important to find out whether the care home will reduce their charge to our approved rate once your capital falls to below £35,000.
Once your capital falls to below £35,000, we will normally only provide-financial help up to our approved rate for care homes. Our approved placement standard rates are currently:
- £825.94 or £828.44 for a placement in a residential home depending on the most recent Quality Gradings awarded to the home by the Scottish Commission for the Regulation of Care.
- £948.59 or £951.59 for a placement in a nursing home depending on the most recent Quality Gradings awarded to the home by the Scottish Commission for the Regulation of Care.
Please read 'Should I split joint capital?' above.
What can I spend my money on?
When you live permanently in a care home, your greatest expense will be your care home fees.
You may want to buy items for your room, such as furniture, carpets, a TV and a phone. If you do spend money on this type of thing, you should keep the receipts so we can take them into account if we assess your finances again.
You may also have to regularly spend money on things like clothes, toiletries, sweets, drinks, trips, and hairdressing. If you later apply for financial help from us, we will need to make sure your capital has reduced at a reasonable rate and that you are not trying to avoid having to pay care home fees.
Can I give my capital away?
If you give gifts of money, we may decide you have done so to avoid having to pay care home fees.
There is no specific amount that you are allowed to give away.
However, if you apply for financial help from us and your total yearly spending (after taking off care home fees) is more than £2,500 we will ask you what you spent the money on, and decide whether you had spent it to avoid or reduce your contribution to care home fees.
We will look carefully at each case, taking account of all your circumstances.
In particular, we will look at:
- the amounts spent or given away
- the reasons for the spending or gift
- how often any gifts were given.
What do I do when my capital falls to the upper limit?
When your capital has almost fallen to the upper limit for financial help, you should apply to us for financial help.
Although you will not be entitled to help until your capital reduces to the upper limit, claiming early makes sure you get the financial help you are entitled to as soon as possible.
You should contact the financial assessment team to ask them to assess your financial circumstances.
As part of the assessment, we will decide whether your capital has reduced at a reasonable rate. We will need to see proof of the capital you had when you moved into the care home as well as your current capital balance.
You should keep a record of your capital, income, and spending, for example:
- details of the proceeds from selling your home
- copies of bank statements
- any bills or debts which you used your capital to pay
Reducing your capital to avoid having to pay care-home fees
Deliberately reducing your capital to avoid paying your contribution to care home fees is called ‘deprivation of capital’.
It is a complicated area, so if you are affected by these rules you should get independent advice from a solicitor.
The following are examples of deprivation of capital.
- giving away a large lump sum of money as a gift
- giving away property by transferring the title deeds to someone without receiving any money in return
- putting money into a trust
Why do you ask about my capital?
Whether or not you qualify for financial help from us depends on your financial circumstances.
By law, we must consider whether you have deliberately reduced your capital to qualify for this financial help.
How does deprivation of capital affect my application for financial help?
If we decide that you have deliberately reduced your capital to qualify for financial help from us, we may reduce or refuse financial help towards the cost of your care home fees.
What if I used to own a house or flat?
If your name was on the title deed of a house or flat, we must find out why your name has been removed from the title deed. We will pass this information to our solicitors. They will tell us whether they think we should include the value of the house or flat in our financial assessment.
What if someone else paid for the house or flat?
If someone else paid for the house or flat but the title deeds were registered in your name, we will have to consider the reasons why someone else paid for the house so that we can decide whether we need to include its value in our assessment. You will have to provide proof that someone else paid for the house or flat.
If you decide that deprivation of capital has happened, how do you assess the value of the capital involved?
If the deprivation of capital involves a property, we work out its value using its value on the open market at the time it was transferred less 10%.
Example
You gave away a property valued at £75,000 one year before you went into a care-home, and you did not receive any money in return. We assess that you should have received £67,500, which is £75,000 less 10%.
Value of the property at the time it was transferred: £75,000
Less 10%: £7,500
Assessed value = £67,500
We call the assessed value of capital you have given away 'notional capital'.
What is notional capital?
Notional capital is capital you are treated as still having even though you no longer actually have it.
‘Notional capital’ includes deprivation of capital through selling your property.
For example, if your house was valued at £100,000 and you have sold it for £10,000, we would treat you as having £90,000 in notional capital and £10,000 in actual capital. If your actual capital and notional capital added together are more than the upper capital limit, you will not be able to receive financial help from us.
Will I be able to get financial help in the future?
As long as you give us the information we need, we will be able to work out how long it will take for your capital to fall to below the upper limit (currently £35,000.
Your 'assessed capital' is how much 'actual' and 'notional' capital you have over the upper limit. We work out how much of your assessed capital you will use to pay your care-home fees. To work out the time we think you will qualify for financial help, the amount you have above the upper limit is divided by the amount of capital you will use to pay your care-home fees.
Assessed capital: £73,000 (£67,500 notional, £5,500 actual)
Upper capital limit: -£35,000
Capital above the upper limit: £38,000
Your capital for care home fees:
Your income retirement pension: £131.65
Work pension: £81.20
Total: £212.85
Less personal allowance: -£34.50
Available income: £178.35
Cost of care home each week: £948.59
Less free personal and nursing care payment: -£360.60
= £587.99
Less available income: -£178.35
Amount of capital for care home fees: £409.64
Capital above the upper limit (£38,000) ÷ by amount of capital for care-home fees (£409.64) = 92 weeks.
So, you would have to pay the full cost of your care-home fees for 92 weeks (approximately 2 years).
When your capital is getting near the upper limit, you can apply to us for financial help. You should contact the financial assessment team who will assess your finances and let you know if you qualify for help.
Can I challenge your decision about deprivation?
You, or a person acting on your behalf, may disagree with our decision that you have reduced your capital to reduce your contribution to your care-home fees. If this is the case, you or your representative can ask us to review our decision by sending your reasons.