Financial assessment

What is a financial assessment?

Your local authority will carry out a financial assessment to help decide who will pay for your care and support. The financial assessment varies slightly depending on the type of care and support you need. For example, if you are living at home, the assessment will be carried out slightly differently to if you are living in a care home.

The person doing the financial assessment is likely to ask you (or your carer or relative) to complete some forms about your finances and declare that this information is true. Someone from the local authority may also visit to help you to fill in the forms.

The Care Act states that if a person is going to receive care and support at a low cost, it may not always be necessary to do a full detailed financial assessment. See ‘Light-touch financial assessments’ below for more information.

It can feel like an invasion of privacy when the local authority or its representative is looking over something as personal as your finances. However, it is important to make sure that you are charged the right amount for your care. Remember, if you refuse to answer the financial questions, you could automatically be charged for your care.

The financial assessment form

When completing financial assessment forms, ‘income’ refers to any money you receive regularly, for example, benefits or a pension.

‘Capital’ refers to any other assets you have. This includes savings, investments and in some cases (for residential care) may include the value of your home.

You will always be allowed to keep a certain amount of income known as a Personal expenses allowance (PEA).

Capital and income will either be:

• fully included in the assessment
• partially taken into account
• or ignored completely (fully disregarded).

For example, the value of your home might be fully disregarded in certain circumstances.

If you have a partner, the forms may ask about their finances too. However, once it is decided what belongs to you and what belongs to your partner, the assessment should only take into account the finances of the person who needs care, and no one else’s. 

If you have joint bank accounts or other assets held jointly, the assessment can only take into account the share belonging to you. It will be assumed that your share is 50 per cent of these joint assets, unless you can show otherwise.

The local authority must provide clear, written information about how much you will pay for your care. This should show clearly what has been taken into account, and regular statements from the local authority should follow.

Light-touch financial assessments

In some circumstances, a local authority may choose to treat you as if you have had a full financial assessment, even if you haven’t. This often happens when the local authority is confident the costs of the care or service will be met, based on the evidence they have. This is called a ‘light-touch financial assessment’.

The main circumstances in which a local authority might consider carrying out a light-touch financial assessment are:

• If you have significant financial resources, and do not wish to undergo a full financial assessment, but want the local authority to arrange your care. You will then be self-funding, but the local authority must be satisfied that you can afford, and will continue to be able to afford, any charges due. The local authority will usually make a charge for this service.
• Where the local authority charges a small or token amount for a particular service that you are clearly able to afford, and carrying out a financial assessment would be disproportionate (for example if it requires more resource to do the financial assessment than to provide the service).
• If you receive means-tested benefits which demonstrate that you would not be able to contribute towards your care and support costs.

If the local authority decides to do this it must tell you that a light-touch assessment has taken place, and make it clear that you still have the right to request a full financial assessment if you want to. You might feel this is necessary if there is a dispute about the charges.