Impact on Assets
Impact on Your Home and Bank Accounts
Understanding how your assets, particularly your home and savings, are treated in the financial assessment is a critical part of planning for care home costs. The Charging for Residential Accommodation Guide (CRAG) 2015 [1] provides detailed rules on how a resident's capital, including property and bank accounts, is valued.
Treatment of Your Home
For many people, their home is their most valuable asset. The rules around whether its value is included in the financial assessment are a common source of anxiety.
The 12-Week Property Disregard
When a person moves into a care home permanently, the value of their former home is disregarded for the first 12 weeks of their stay. This provides a breathing space to allow the resident and their family to decide what to do with the property, whether that is to sell it or to arrange for a third party to contribute to the fees.
When is a Property Disregarded Indefinitely?
In certain situations, the value of the property can be disregarded for longer than 12 weeks, and in some cases, indefinitely. This is designed to protect vulnerable family members who may be living in the property. The property will not be included in the financial assessment if it is occupied by:
- A spouse or civil partner
- A relative who is over the age of 60
- A relative who is incapacitated (i.e., receiving certain disability benefits)
- A child of the resident who is under the age of 16
If any of these conditions are met, the property's value will not be counted as capital for as long as the qualifying person continues to live there.
Jointly-Owned Property
If a property is jointly owned, for example with a spouse, children, or other relatives, the financial assessment can only take into account the resident's share of the property's value. The value of the other owner's share is protected. The HSC Trust will need to determine the resident's "beneficial interest" in the property, which may not be the same as their legal share.
Capital Limits and Bank Accounts
All of a resident's savings and investments, including money held in bank accounts, are considered capital. The CRAG guidelines set out clear capital limits which affect how much a resident will be asked to contribute.
Capital Limits (Current Figures for 2025/26)
| Capital Level | Impact on Contribution |
|---|---|
| Upper Capital Limit: £23,250 | If a resident has capital above this amount, they will be expected to pay the full cost of their care (the standard rate). |
| Between the Limits: £14,250 - £23,250 | If capital falls between these two limits, the resident will be expected to contribute to their fees from their income, and a "tariff income" will be assumed from their capital. |
| Lower Capital Limit: £14,250 | If a resident has capital below this amount, it will be fully disregarded, and they will only be asked to contribute from their income. |
Tariff Income
For those with capital between the upper and lower limits, a tariff income is calculated. This is an assumed level of income derived from the capital, which is added to the resident's actual income during the financial assessment. The rate is £1 per week for every £250 (or part of £250) of capital between the two limits. For example, a person with £16,250 in savings would have an assumed tariff income of £8 per week (£2,000 / £250 = 8).
References
[1] Department of Health, Social Services and Public Safety. (2015). Charging for Residential Accommodation Guide (CRAG) 2015. https://www.health-ni.gov.uk/publications/guidance-charging-residential-accommodation