When you or a loved one needs residential care, you may be worried about having to sell your home to pay for the fees. We explain the means testing process, when your property won't be included in the means test, and what options there are if you don't want to sell your home.
What is the means test?
If the local authority is arranging the care home, they will do a means test to decide how much you should pay, and they may take into account the value of your home.
A means test is a financial assessment where the local authority calculates how much you may need to pay towards the cost of care fees. The means test will look at your capital and income, such as your savings and your property. Certain types of income, such as money from certain benefits and pensions, may not be counted. If your income and capital is above a certain amount you will have to contribute to your care fees.
Does my home have to be included in the means test?
In some situations, your home won’t be taken into account in the means test. There are a few circumstances where this applies. If you need temporary or short term care only, your home won’t be included in the means test.
Your home also won’t be counted if it’s still occupied by:
- your partner or former partner, unless they are estranged from you
- your estranged or divorced partner IF they are also a lone parent
- a relative who is aged 60 or over
- a child of yours aged under 18
- a relative who is disabled.
We jointly own our home – how will it be assessed?
In the means test the local authority must take into account joint owners who own different amounts of the property. They shouldn’t assume that joint owners have equal shares, although you may have to provide evidence to prove this.
And remember, if your partner is going to stay living in the property it may not be counted at all in the means test.
How will they value my home?
Your property will be included in the means test at its present market value but less any mortgage or loan you may have on it and less 10% of its value where there would be expenses to sell it.
I really don’t want to sell my home – is there anything I can do?
Giving your home away
Some people consider giving their property to someone else, such as a child or relative, so that it won’t be counted in the means test. However, this may count as “deliberate deprivation of assets” – it’s important to find out more about how that applies to you if this is something you are thinking about.
There is a system where people don’t have to sell their homes immediately to pay for their care. This is called the deferred payment system. This is where you can delay paying the costs of your care until a later date. This could last until you die, after which the costs will be paid from your estate, or could be a temporary arrangement to give you time to sell your home when you choose to do so.
Your local authority must offer you this option if you are eligible. The Money Advice Service offers more information about eligibility for deferred payments.
Find out more about paying for care and care homes in our free resources:
Treatment of property in the means test for permanent care home provision factsheet (PDF 693 KB)
Care homes guide (PDF 328 KB)