Paying for Social Care

After a care needs assessment establishes that you have eligible care needs, your local council will carry out a financial assessment (sometimes called a means test) to work out how much you will be charged for your care. This is a separate process from the needs assessment.

The financial assessment looks at two things: your capital (savings, property, and other assets) and your income (pensions, benefits, and other sources). The council uses rules set by the government to calculate your contribution.

You have the right to refuse a financial assessment, but if you do the council will treat you as a self-funder — meaning you must pay the full cost of your care yourself. It is almost always worth completing the assessment, as you may be entitled to more help than you expect.

The amount of capital you have determines your contribution in three bands:

• Above £23,250: You are expected to pay the full cost of your care yourself (a "self-funder") until your capital falls below this level.
• Between £14,250 and £23,250: The council will help with costs. For every £250 of capital you have above £14,250, the council assumes you receive £1 per week in income (called "tariff income"). This reduces the amount the council contributes.
• Below £14,250: Your capital is largely disregarded for the purposes of the means test. The council will fund your care subject to income contributions.

These thresholds were set in 2010 and have remained frozen since. Campaigners have long argued they should be uprated. The government's planned reform (a £86,000 lifetime cap and higher thresholds) was postponed indefinitely in 2023.

Capital includes savings, investments, stocks and shares, second properties, and most other assets. Your main home is usually disregarded (i.e., not counted) if:

• Your spouse, civil partner, or a dependent child lives there; or
• A close relative aged 60 or over lives there; or
• You are receiving care at home (rather than in a care home).

If your home is counted, the council may offer a deferred payment agreement (DPA), allowing you to delay payment until after your death or the sale of your property.

Councils are alert to deliberate deprivation of assets — deliberately reducing your assets (e.g., giving away money or property) to avoid paying care charges. If the council decides this has happened, it can treat you as if you still own the asset.

Most income is taken into account in the financial assessment, including state pension, private pensions, rental income, and most benefits. However, some income is disregarded, such as Disability Living Allowance mobility component and earnings from part-time work.

Crucially, the council must always leave you with a minimum income. If you are in a care home, you must keep a personal expenses allowance of at least £30.15 per week (2025/26) for spending on personal items. If you are receiving care at home, the minimum income guarantee (MIG) is higher — at least £218.35 per week for those of working age and £218.35 for those of pension age (2025/26 rates).

Attendance Allowance and the care component of Disability Living Allowance / Personal Independence Payment are taken into account for residential care but can be disregarded for care at home in some circumstances. Always check with an adviser.

If you think the council has made a mistake in its financial assessment — for example, by counting assets that should be disregarded, or by calculating tariff income incorrectly — you should first raise it informally with your social worker or care manager. If that does not resolve the issue, use the council's formal complaints procedure.

If you exhaust the council's complaints process without a satisfactory outcome, you can complain to the Local Government and Social Care Ombudsman (LGSCO). The LGSCO can investigate maladministration and recommend remedies including financial redress.

Independent financial advisers who specialise in care funding (sometimes called specialist later-life advisers) can also review your financial assessment and identify errors or overlooked disregards.