FACTSHEET No. 19

Charging for Residential Accommodation

This factsheet is a basic introduction to charging for residential accommodation.

Charging in England, Northern Ireland, and Wales

Once it has been agreed that you need to enter residential care the local authority will make an assessment to see how much you have to pay. This assessment is similar to that for income support or pension credit guarantee credit though there are some differences, in particular the capital rules. 

Once the assessment has been made you will have to pay a weekly amount towards your residential accommodation and the local authority will make up the difference. You will always be left with an amount called the personal expenses allowance for your personal needs. You can also keep any disability living allowance mobility component you are getting. 

There are different rules if you are a temporary resident in a home.

Local authorities have a power to charge for residential care under section 22 of the National Assistance Act 1948. The method of assessing how much you have to pay is contained within the National Assistance (Assessment of Resources) Regulations 1992.

Local authorities use guidance, "Charging for Residential Accommodation Guide" (CRAG),  when making assessments. The guide is updated annually (current publication date 11 April 2011).

CRAG is divided into 12 sections. Some of these sections are quite detailed and you will need to read them carefully or get advice. 

The sections are:

1. introduction - including the legal basis for charging, reserved rights and complaints.
2. less dependent residents - covers the effect of those who used to have accommodation provided under the National Health Service Act 1977.
3. temporary residents - temporary can mean up to 52 weeks. If you are a temporary resident the local authority does not have to carry out a charging assessment for the first 8 weeks of your stay though they can ask for an amount from you that seems reasonable. This section details what might be disregarded when working out this amount.    
4. couples - if you are part of a couple and you enter residential care a local authority has no power to assess your income jointly. You are treated as two separate people. There are no exceptions to this rule. 
5. personal expenses allowance (PEA) - this is currently £22.60. The PEA in Wales is £23.00. Local authorities have the power to give you a higher amount in certain circumstances.
6. capital - this describes what counts as capital. Capital of £14,250 or less is disregarded. Anything above this will mean that you have to pay more towards your accommodation. If you have capital above £23,250 you have to pay the full weekly charge for your accommodation. These capital limits are the same in Northern Ireland but in Wales there is only one upper capital limit of £22,500. 
7. treatment of property - this considers situations where your property can be disregarded when assessing your capital. 
8. income other than earnings - this explains how different kinds of income might be treated when assessing how much you pay towards residential care. Some income, such as disability living allowance mobility component is totally disregarded.
9. earnings - this describes what counts as earnings and what earnings might be disregarded.
10. trust funds - this tells you what a trust fund is and how different trust funds are treated.
11. third party payments and top up's - discusses what they are and how they can be used to clear arrears or meet higher fees. 
12. students - this section deals with student income and how it is treated.

You have the right to complain against a residential accommodation assessment in the same way as you would against a community care assessment.

Charging in Scotland

Guidance on care charges are contained within the Scottish version of the charging for residential accommodation guide. In Scotland the upper capital limit is £23,500 and the lower limit is £14,500.

The personal expenses allowance is £22.60.

UK savings disregard for over 65s

The Department of Health and devolved governments apply a savings disregard for residents aged 65 or over. The amounts below are for 2011/12 and vary slightly across the UK. For more information see the Disability Rights Handbook.

Where can I get more information?

You should seek further advice if you want to challenge a decision about your benefit. You can get help with your appeal at a local advice centre, such as a citizen's advice bureau. You can get more information about this from our factsheet F16, Finding a local advice centre, which is available at www.cara-online.org

Age concern produce a care home checklist, to help you choose a care home, on their website at www.ageconcern.org.uk.

Central Africa’s Rights & AIDS (CARA) Society has also published Benefit appeals - A guide to benefit appeals for advisers and disabled people. This guide helps you prepare for an appeal tribunal and will increase your chances of success at the hearing. It takes you through all the stages of the benefit decision-making process from the moment you receive an unsatisfactory decision through to the tribunal hearing.

It is available to have a look at it on our website at www.cara-online.org or by contacting CARA on +44 (0) 844 478 0015 -Mob: +44(0) 795 695 2645 -Fax: +44(0) 872 115 8436 -Email: info@cara-online.org.

Updated 8 April 2011