How financial assessments are calculated

Income

Income includes all money you receive on a regular basis or a payment you receive which relates to a particular length of time. Income includes:

• pensions such as state pensions, occupational/works pensions or personal pensions
• benefits
• annuities
• money you have earned (wages)
• drawings
• trust fund payments

To carry out a financial assessment, full details of your income are needed. We only take into account your own income and not the income of your spouse or partner in determining how much you will pay.

However, sometimes information about income and capital of other members of your household is necessary to establish your entitlement to benefit and income and also to carry out affordability checks.

Your spouse or partner does not have to provide any financial information about themselves. However, we will not be able to provide them with help to claim benefits if we have no knowledge of their financial situation. This may also affect their ability to calculate some household expenses/allowances.

What you need to provide

We will ask to see payment books or bank account statements with details of your income to confirm the details.

How we calculate your income

We will treat your income in one of three different ways.

1) Examples of types of income which are taken fully into account are:

• most Department for Work and Pensions (DWP) benefits (for example, Income Support and/or Pension Credit)
• retirement and/or Personal Pensions
• occupational and/or Works Pensions
• annuity income
• income from Insurance policies

2) Examples of types of income which are partly taken into account and partly disregarded are:

• War Disablement Pension
• War Widow’s Pension
• Armed Forces Compensation Scheme

3) Examples of types of income which are fully disregarded are:

• Personal Independence Payment (PIP)
• Christmas Bonus
• War Disablement Pension Mobility component
• Social Fund Payments
• War Widow’s Special Payments
• Winter Fuel Payment
• Child Benefit

All income is converted into weekly amounts, and the total weekly amount to be taken into account for assessment purposes is calculated.

Income covers a wide range of payments to you and the regulations are quite complicated. If you have any specific queries, or require further help or information, please do not hesitate to ask. See the back of your statement for contact details.

Capital

Capital refers to assets such as savings, stocks and shares and property.

You will be asked to provide full details of all your capital. Again, we will need to verify all the information by looking at recent documentation relating to the capital. This includes:

• savings held in bank accounts (deposit accounts and current accounts)
• building society accounts
• post office accounts
• any capital held by a third party (such as a relative)
• market value of other investments, stocks and shares, premium bonds or other assets you own should also be recorded

It is helpful, if you do have passbooks, that they show the up-to-date balances for each of your accounts.

If the total of your capital assets is more than £23,250, you will be assessed to pay the standard rate - which is the full cost of your care and support to us.

When your property isn't taken into account

The value of your home will not be included in the capital assets available to you to pay for your stay in respite residential accommodation, or for non-residential services.

Sometimes the value of a person’s home is not taken into account, for example when a partner continues to live there. We will advise you of the situations where property is not included.

When your property is taken into account

The value of your home may be taken into account by us when calculating how much you should pay towards care home fees after the first 12 weeks of your stay, if you are a permanent resident.

Where the value of your home is taken into account, and you do not have sufficient income or other assets/savings to meet the charge you have been assessed to pay, you may be eligible for a Deferred Payment Agreement (DPA).

A DPA allows you to have your charges paid by the council by way of loan. The loan is secured against your property in a similar way to a mortgage. You will not be required to pay off the ‘loan’ in your lifetime unless you sell your house when the loan will become due for payment.

If you do not enter into a Deferred Payment Agreement, then we will expect full payment once any property disregard has come to an end.

Your Community Finance Officer will explain the Deferred Payment Agreement with you. You can also read more about Deferred Payment Agreements.

The Charging and Assessment Regulations and the statutory guidance concerning financial assessment and the treatment of property is complex. If you are anxious about knowing how your property will be treated, how people living in your property will be affected or have any other questions, please ask us.

Other property or land which you own

Other property or land which you own, apart from your home, cannot be disregarded. Its capital value, or your interest in it if it is jointly owned, will also be included as a capital asset.

How we calculate your capital

After all the information has been supplied about your capital assets, we will calculate the full value of all your capital assets by adding together the value held in property, land, savings and investments.

If your capital assets total between £14,250 and £23,250

You will be expected to pay a charge from your capital. This is called a tariff. It is calculated from the amount of your capital and included as income. You are expected to contribute an additional £1 for every complete £250 or part of £250 above £14,250.

For example, if you have £15,900 capital available to you, a tariff income of £7 will be included in your assessable weekly income. Here is a breakdown of this example:

If your capital equals £15,900, the less capital disregarded is £14,250 - this leaves £1,650.

Divide £1,650 by £250 (or part of £250) equals £7 for the tariff charge.

If your capital assets total less than £14,250

This will have no effect on your assessment. Capital of £14,250 or less is fully disregarded. You will be assessed only on your weekly income.

Do not give away capital or make generous gifts

You should not give away or part with any capital, including property, with the intention of paying a lower charge for your care and support services now or in the future. Neither should you make regular generous gifts from your income with a view to reducing the amount you may have to pay towards your adult social care services.

In cases where we consider there was an intent to deprive to avoid charges, we may charge the person as if they still own the asset or if the asset has been transferred to another person, we are entitled to seek to recover the lost income from the person who received the asset.

Being able to spend income and assets as a person sees fit is important for promoting wellbeing and enabling a fulfilling and independent life. However, it is also important that people pay their fair contribution towards their care and support costs.

Allowances

If your capital assets total less than £23,250 you will not be asked to pay the full cost of your care. Further allowances may also be made against your total assessed income.

The Personal Expenses Allowance

The Personal Expenses Allowance is set by legislation each year by government. This money is for your own personal use whilst living in residential or nursing care.

If you have made private provision for your retirement you may be eligible for additional allowances which could reduce your assessed charge. Find out more about Personal Expenses Allowance.

Household Expenses Allowance

Household Expenses Allowance may also be made for unavoidable expenses you may have. The amount of allowance is calculated using information about your household expenses provided to us.

Disability Related Expenditure

Disability Related Expenditure will be taken into consideration. We can make allowances for the extra costs you have to pay because of your disability or long-term condition. Evidence of purchases and costs will be required.

Types of disability expenses you may have may be (but not exclusive to):

• help with cleaning
• special diet
• extra laundry
• extra bedding
• special clothing
• transport
• extra heating costs
• special equipment
• care call

When your assessment is calculated, the financial circumstances of your spouse or partner can be considered in order to ensure that the person remaining at home has enough money to live on.

The amount of allowance for a spouse or partner at home varies depending on the individual circumstances.

Once any allowances have been deducted from your assessed weekly income, the amount remaining will be your charge for your care and support. We will send you a bill for this amount. Statements are sent every four weeks in arrears for payment and our preferred method of payment is Direct Debit. Please ask a Community Finance Officer for a Direct Debit mandate so that this can be set up.

If you choose to take a personal budget as an Individual Service Fund (ISF)

The amount of your assessed charge will be deducted from the payments received from us, you will need to pay your charge in to the account in order to purchase the care and support that you have been assessed as needing.

It is important that you pay your charge into the account so that the provider can deduct their charges from the account as necessary, the provider may refuse to provide services if payment of their charge is an issue.

If you don’t purchase the care you have been assessed as needing the practitioner is entitled to re-assess your needs and this may result in your services being reduced and our contribution being reduced accordingly.