Do I have to sell my home to pay for care?

How much you'll need to pay for care will be worked out through a financial assessment. Whether or not your home is included in the financial assessment will depend on your circumstances. Find out more about whether or not you'll need to sell your home to pay for care.

How does the local council work out the care home fees I should pay?

If the local council is arranging your care home, they'll do a financial assessment to decide how much you should pay towards it, and they might take into account the value of your home. A financial assessment is where the local council calculates how much you need to pay towards the cost of your care.

The financial assessment will look at your capital and income, such as your savings, property, investments, pensions and any benefits you’re eligible for (even if you’re not claiming them). Certain types of income and capital are ignored in the financial assessment. For example, certain types of benefits, such as the mobility component of Disability Living Allowance or Personal Independence Payment, can't be counted.

If your capital is above £23,250 you’re likely to have to pay your care fees in full. If your capital is under £23,250 you might get some help from the local council, but you may still need to pay a contribution to the fees.

Will my home have to be included in the financial assessment?

In some situations, your home won't be taken into account in the financial assessment. There are a few circumstances where this applies.

Moving into a care home temporarily

If you need short-term or temporary care in a care home, your home won't be in the financial assessment.

Moving into a care home permanently

If you move into a care home permanently, your home won't be counted in the financial assessment if any of the following people still live there:

• your partner, spouse or civil partner
• your estranged or divorced partner if they're also a lone parent
• a relative who is 60 or over
• a relative who is under 60 who has a disability
• a child of yours aged under 18.

Local councils can also choose to leave the value of your home out of the financial assessment, even if someone living there doesn’t fit into one of the categories above. They don’t have to – but they should consider any requests.

How will they calculate the value of my home?

Your property will be included in the financial assessment at its present market value. Any mortgage or loan you may have on it would be taken off the values, as will 10% of its value to account for the expenses to sell it.

How will my home be assessed if I own it jointly?

In the financial assessment, the local council have to 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.

What can I do to avoid selling my home?

If your home is taken into account in the financial assessment, you have a few options. The rules around having to sell your home can be complicated, particularly with jointly owned property, so get specialist advice if you need.

Deferred payment agreements

If your home is included in the financial assessment, your council must offer you a deferred payment agreement (DPA) if you meet certain eligibility criteria.

A DPA means the council agrees to provide financial help with your care home fees on the basis that you pay the council back from your property at a later date – either when the property is sold or from your estate when you die. This lets you postpone having to sell your property to pay care fees, if you can’t – or don’t want to – at the time of the assessment.

The council can charge an admin fee to set up the DPA and you can be charged interest on deferred fees. If you’re thinking about a DPA, you should get independent financial advice before signing anything.

Renting out your home

You might choose to rent out your home when a DPA is in place. Rental income can be used to contribute towards your care fees – which reduces the amount you’re deferring.

But think carefully about what’s involved in renting out your home. For example, rent counts as taxable income and so it can affect benefit payments. You should seek independent financial advice if you’re thinking about renting your home – as well as letting the council know.

Giving your home away

It’s important to think very carefully about transferring ownership of your home to someone.

If the council thinks you’ve given your home away to avoid care fees, it can apply ‘deliberate deprivation of assets’ rules and treat the property as if it still belongs to you.