Jargon Buster - Money Category

If a person is considering a ‘deferred payment’ agreement with their local council to fund their own care, the council will need to make sure that the person can afford to repay them when the time comes. This is called making sure there is ‘adequate security’ for the agreement.

This security may be the value of the person’s house, or a valuable possession (for example, a piece of art or jewellery), or someone who can guarantee that payment will be made.

Councils must publish a policy saying what types of security they will accept.

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• Money

Related Jargon

• Deferred payments

Changes proposed by the government in 2021 to the way local councils should charge people for adult social care. These changes were due to be made in October 2023 but were postponed until October 2025 in the government’s Autumn Statement in November 2023.

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• Money

A service that local councils may offer to manage a person’s money for them, if they are unable to do this and have no family or friends who can help them. The council can receive benefit payments on a person’s behalf, and arrange the payment of their living costs. People may have to pay their council a fee to provide this service.

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• Money

‘Money that a person has in cash, savings accounts, current accounts, Premium Bonds, investments, property and land.

A financial assessment will take into account how much a personal capital a person has and this will determine how much they will have to contribute towards the cost of their care and support.

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• Money

Related Jargon

• Capital limits
• Financial assessment

‘A financial limit that sets out at what point a person is entitled to get funded support from their local council to meet their eligible care and support needs.

There is an upper and a lower capital limit.

The upper capital limit is £23,250. People with more capital than this can ask their local council to arrange care and support for them, but they will have to pay the full cost of their care and support until their capital falls below the upper limit.

The lower capital limit is £14,250. If a person has capital between the upper and lower limit, they will have to pay £1 per week towards their care and support costs for every £250 in capital between the two amounts.

If a person’s capital is below the lower capital limit, they will not be required to contribute to the cost of their care and support from their capital.

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• Money

Related Jargon

• Financial assessment

A limit to the amount a person has to pay towards the cost of their care.

A cap of £86,000 was due to be introduced in October 2023 but the reform was postponed until October 2025 in the government’s Autumn Statement in November 2023, and then scrapped by the government in July 2024.

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• Money

A tool for people to work out the cost of care and support.

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• Money

Related Jargon

• Resource Allocation System (RAS)

A weekly payment from the government to people who support a partner, family member, friend or neighbour who requires some extra help as they grow older, or due to a disability or health condition.

People can claim Carer’s Allowance is they support someone for at least 35 hours a week and the person gets certain benefits.

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• Carers
• Money

Services that have a cost and people have to pay for.

Chargeable care and support services include home care and day care. Where a person’s financial assessment shows they can afford to pay for some or all of their care and support, they will be required to pay towards the cost of the service.

The law says that the amount local councils charge must be reasonable, and that people must not be charged more than their financial assessment shows they can afford to pay.

There are also some services that local councils are not allowed to charge people for. These are called non-chargeable services.

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• Care and support services
• Money

Related Jargon

• Financial assessment
• Non-chargeable services

The amount of money a person pays towards the cost of their care and support.

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• Money

Related Jargon

• Financial assessment
• Self-funding

When a person and their local council both contribute to the cost of their care and support.

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• Money

A sum of money set aside to fund any unexpected or unplanned spending.

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• Care and support services
• Money
• Self-directed support and personal budgets

A comparison of how much something costs in relation to how much benefit is gained from it.

Looking at cost-effectiveness can help with decisions about how money should be spent.

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• Assurance and regulation
• Money

Related Jargon

• Value for money

The amount people pay for everyday things like food, rent and bills.

Social care charging rules mean people must people keep enough money to meet these costs.

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• Money

The collection of money that is owed to an organisation by someone who hasn’t paid on time.

The law allows local councils to claim back money from people for care and support they have received, if they have had a financial assessment and can afford to contribute and have not paid. If they live in a care home or extra-care housing, their local council should offer them a deferred payment arrangement before starting debt recovery. Debt recovery should be a last resort, and councils should always consider people’s individual circumstances.

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• Money

Related Jargon

• Financial assessment

Deferred payments mean that people do not have to sell their home in their lifetime to pay for the cost of their care and support in a care home or in supported living.

The cost of care and support is deferred, and will need to be repaid by the person (or someone acting on their behalf) at a later date.

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• Money

When someone deliberately reduces the amount of income, savings or property they have (their assets), in order to qualify for help from their local council with paying for care costs or for various benefits.

The council may judge that people have tried to deliberately avoid paying for care and support costs by depriving themselves of assets.

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• Money

Related Jargon

• Assets
• Financial assessment

Money that disabled people have to spend on things that non-disabled people don’t pay for, like extra laundry, high heating bills or special clothes.

The law says that local councils should look at these expenses when completing financial assessments, to work out how much people can afford to pay towards the cost of care and support.

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• Disability
• Money

Related Jargon

• Financial assessment

When the value of a person’s main or only home is not included in a financial assessment to calculate how much the person can afford to pay towards the cost of their care and support, this is called a ‘property disregard’.

There are rules that say when local councils can apply the property disregard. If councils choose to apply the disregard in other circumstances, this is called a ‘discretionary disregard’.

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• Money

Related Jargon

• Property disregard
• Twelve week disregard

A fixed amount (up to £144 per week) of a person’s income that local councils must allow a person to keep (if they want to) if they have a deferred payment agreement. The council can require people to contribute the rest of their income towards the cost of their care and support.

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• Money

A financial plan offered by private lenders if people own their own home. It allows people to release some money from the value of their home to pay for care and support, or for other things. This is then paid back to the lender after the person’s death or when they move permanently into a care home. People should always get independent expert advice before taking out a plan like this.

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• Money

Before the Care Act 2014, fairer charging guidance told councils how much they should charge people for things like home care and day services. These fairer charging policies were replaced by the Care Act 2014, which provides a single legal framework for charging for care and support.

This framework is intended to make charging fairer and more clearly understood by everyone. It says that people should only be required to pay what they can afford towards the cost of their care and support.

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• Money

When someone harms a person by stealing from them. This could include theft , fraud, internet scamming, coercion in relation to an adult’s financial affairs or arrangements, for example in connection with wills, property, inheritance or financial transactions, and the misuse of property, possessions or benefits.

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• Money

The way local councils work out how much a person can afford to pay towards the cost of their care and support.

The financial assessment usually happens after the assessment of the person’s care and support needs. If it happens at the same time, it must not influence the needs assessment.

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• Assessment
• Money

A ‘top up’ is an extra amount of money that must be paid if a person chooses to live in care home that costs more than their personal budget.

A top-up is usually paid by the person’s family or a friend, or in certain circumstances by the person. When the top up is paid by the person this is called a first party top up.

People can only make their own top up payment if they are subject to the 12-week property disregard, they have a deferred payment agreement, or their home is provided under Section 117 for mental health aftercare.

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• Housing with care and support
• Money

Related Jargon

• Deferred payments
• Section 117
• Third party top-up
• Twelve week disregard

A way of paying for long-term care and support. The person who requires support makes a big payment to an insurance company, and gets a regular income, which is guaranteed for their lifetime to pay their care costs. There are many companies selling annuities, and independent information on the different options can be found at www.societyoflaterlifeadvisers.co.uk .

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• Money

A rough guide to how much it will cost a local council to meet a person’s care and support needs.

An indicative amount should be shared with the person, and anybody else involved, at the start of care and support planning.

The indicative amount may increase or decrease depending on the decisions made in planning support, but the final, signed-off personal budget must always be sufficient to meet the person’s eligible care and support needs.

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• Care and support planning
• Money
• Self-directed support and personal budgets

Related Jargon

• Eligible care and support needs
• Personal budget

A way of managing a personal budget where the money is held by a ‘third party’ organisation in a managed account. The person remains in control of what the money is spent on, but doesn’t have the responsibility of managing the budget.

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• Money
• Self-directed support and personal budgets

Related Jargon

• Personal budget

If a person has a deferred payment agreement and the council is paying their care home fees until their home is sold, the ‘legal mortgage charge’ is the amount that must be repaid to the council when the sale takes place.

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• Money

Related Jargon

• Deferred payments

Where a local council treats a person as if a financial assessment has been carried out, because the council is satisfied that the person can provide evidence to show that they can afford to (and are willing to) pay the full cost of their care and support.

Local councils may also consider a light-touch financial assessment where there is a very small cost for a service which the person is clearly able to meet, or where a person receives benefits which demonstrate they would not be able to contribute towards the cost of their care and support.

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• Assessment
• Money

Related Jargon

• Financial assessment

The lower capital limit is £14,250. If a person has capital (usually property and savings) between the upper limit (£23,250) and lower limit, they will have to pay £1 per week towards their care and support costs for every £250 in capital between the two amounts.

If a person’s capital is below the lower capital limit, they will not need to contribute to the cost of their care and support from their capital.

Categories

• Money

Related Jargon

• Capital limits
• Financial assessment
• Upper Capital Limit

The amount of money a person pays towards the cost of their care and support.

The means test is called a financial assessment. This is how a local council works out how much a person can afford to pay towards the cost of their care and support.

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• Money

The rules around charging for care and support state that a person who draws on care and support outside a care home must have enough money to pay for their daily living costs, like food, rent and other bills. The minimum income guarantee (MIG) is set out in the Care and Support (Charging and Assessment of Resources) Regulation 2014.

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• Money

Money paid by the NHS to care homes or nursing homes to cover the cost of nursing care provided to people living in the homes. It is paid to cover the nursing element of care both for people paying for their own care and support and for people who have council funded care and support.

It is different from continuing health care funding, and may be paid if people don’t need full continuing health care but still need some nursing care.

If people are paying their own care home fees, the amount that the NHS pays for their nursing care should be deducted from their bill. People should be assessed for NHS continuing health care before a decision is made about whether they are eligible for NHS-funded nursing care, and they won’t need to make a separate claim.

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• Health and health care
• Money

Related Jargon

• Continuing health care (CHC)

Public funds are benefits, services and housing that people can access if they meet relevant eligibility criteria.

People coming to live in the UK are expected to be able to live without needing access to public funds. Most people allowed by the government to stay in the UK on a temporary basis (for example to work, study or travel) are given no access to these public funds. This is known as ‘no recourse to public funds’ or NRPF. People in the UK without lawful status also have no recourse to public funds.

The NRPF condition will be lifted in some circumstances, for example if a person is destitute or at risk of imminent destitution, or for reasons relating to the welfare of a child.

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• Money

Related Jargon

• Public funds

The amount of money a local council must let a person keep if they live in a care home. The money is for personal use, to spend on things like clothes and other items that are not part of the person’s care.

The personal expenses allowance is agreed by the government.

Local councils must not ask a person to put their personal expenses allowance towards the cost of meeting their eligible needs.

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• Money

A benefit payment often known as PIP that can help people with extra living costs if they are disabled or have a long-term health condition, and they have difficulty doing certain everyday tasks or getting around because of their condition.

People can get PIP if they are working, have savings or are getting most other benefits.

There are 2 parts to PIP – a daily living part to help people with everyday tasks, and a mobility part if people need help with getting around. Whether people get one or both parts, and how much people get, depends on how difficult they find everyday tasks and getting around.

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• Money

When two different organisations, such as an NHS organisation and a council, agree to each put an amount of money into a single pot to pay for a particular health or care service.

People in the same household or community may also choose to pool their personal budgets and combine elements of their care and support plans where they have similar care and support needs or aspirations.

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• Joined-up health and social care
• Money

A way of managing a direct payment where the local council pays a person’s personal budget on to a card, rather than into a separate bank account.

People should always be offered the choice of having a ‘traditional’ direct payment paid into a separate bank account, and pre-payment cards should not be provided as the only option to take a direct payment. Local councils should also not encourage people to have pre-payment cards as a way of limiting their choice and control.

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• Money
• Self-directed support and personal budgets

When the value of a person’s main or only home is not included in a financial assessment to calculate how much the person can afford to pay towards the cost of their care and support.

The value of the person’s main or only home will be disregarded if:
a) the person is not living in a care home, or
b) the person is living in a care home on a temporary basis and intends to either return to their home, or sell their home to move to somewhere more suitable, or
c) the person no longer lives in the home but someone else still lives there and it is that person’s main or only home, for example the person’s partner, parent, child or another relative who is aged 60 or over, or who is incapacitated.

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• Housing with care and support
• Money

Related Jargon

• Discretionary disregard
• Twelve week disregard

Financial advice that is provided by an organisation that has to follow the rules set by the Financial Conduct Authority, to help people plan for the future. Councils have a legal duty to help people find advice that is independent from the council on things like paying for care and support. It is likely that people will have to pay for this type of advice.

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• Assurance and regulation
• Money

Money that is set aside by the government or another organisation (such as an NHS organisation or local council) for a specific purpose, and cannot be spent on anything else.

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• Money

An amount of money that is not counted in a financial assessment if a person is aged 65 or over, lives in residential care, and receives Savings Credit as part of their Pension Credit.

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• Money

Related Jargon

• Financial assessment

When a person pays for their own care and support and does not receive financial help from their local council.

People with capital worth more than the upper capital limit of £23,250 are referred to as ‘self-funders’. They are entitled to a needs assessment, and can ask their local council to arrange care and support for them, but they will have to pay the full cost of their care and support until their capital falls below the upper limit.

Categories

• Money

Related Jargon

• Capital limits
• Upper Capital Limit

An extra amount of money that local councils can add to council tax to help pay for care and support. It is charged to every council tax payer, regardless of whether they draw on any care and support. Like any other tax, the amount people pay is not related to any services they receive.

Money raised through the social care precept must only be spent on adult social care and not on anything else that the council does.

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• Money

An amount of a person’s capital that is calculated as income during assessments for welfare benefits or financial assessments for care and support.

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• Assessment
• Money

An extra amount of money that must be paid if a person chooses to live in care home that costs more than their personal budget.

A top-up is usually paid by a ‘third party’ who must be willing and able to pay the additional cost. The third party may be the person’s relative or friend, or could be a charity.

In some circumstances the person can pay their own top-up fee. This is called a ‘first party top-up’.

This extra cost must always be optional and never because there is no choice of available and affordable accommodation.

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• Housing with care and support
• Money

Related Jargon

• First party top up
• Top-up fee

An extra amount of money that must be paid if a person chooses to live in care home that costs more than their personal budget.

A top-up is usually paid by the person’s family or a friend (referred to as a ‘third party’), or in certain circumstances by the person. Whoever pays must be willing and able to pay the additional cost.

This extra cost must always be optional and never because there is no choice of available and affordable accommodation.

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• Housing with care and support
• Money

Related Jargon

• First party top up
• Third party top-up

A twelve week period when a local council must not include the value of a person’s main or only home in a financial assessment to calculate how much the person can afford to pay towards the cost of their care and support.

Charging arrangements for care and support aim to make sure people don’t have to sell their home at a time of crisis. The 12-week disregard gives people time to decide how to meet their contribution towards the cost of their care and support.

The 12-week disregard applies when:
a) the person first moves in to a care home on a permanent basis, or
b) when a separate property disregard ends unexpectedly.

Local councils may also choose to apply the 12-week disregard if there is a sudden change to the person’s financial circumstances.

Categories

• Assessment
• Money

Related Jargon

• Discretionary disregard
• Property disregard

‘A financial limit that sets out at what point a person is entitled to get funded support from their local council to meet their eligible care and support needs.

The upper capital limit is £23,250. People with more capital than this can ask their local council to arrange care and support for them, but they will have to pay the full cost of their care and support until their capital falls below the upper limit.

 

Categories

• Money

Related Jargon

• Capital
• Capital limits
• Financial assessment