Financial assessment for care in Wales

In Wales, there is a maximum weekly charge for homecare. The current maximum weekly charge is £100 per week. This means that nobody should be charged more than £100 per week for their care at home. This includes care packages offering support with daily activities such as washing and dressing, day centres and most types of respite.

Some people will be charged less if their care costs less. For example, if the care only costs £30, that is the maximum charge the local authority can ask for.

A person will also be charged less if they have less than the capital limit for homecare and limited income. The capital limit for homecare in Wales is currently £24,000 (2024 rate). 

If the person has more than £24,000 in available capital, they can be asked to pay for their own homecare. This will only be up to the maximum weekly charge amount. Their homecare may cost more than the maximum weekly charge. In this case, the local authority will contribute and cover any costs above this.

If the person has less than £24,000 in available capital, their capital will not be included in the financial assessment. The local authority will only consider their ability to pay for care using their income. The local authority must ensure the person keeps enough income to pay for their living costs. This is known as their Minimum income amount (MIA).

The MIA is the minimum amount of income the person must be left with each week. The amount is different for homecare and residential care.

The MIA for homecare is designed to be enough income to pay for living costs. These may include rent, food and utilities. The MIA only comes into effect if a person has less than the capital limit for homecare. This limit is currently £24,000.

The MIA is made up of three parts:

• A basic entitlement – this amount will depend on whether a person is:
  — single or in a couple
  — over or under State pension age
  — a carer or living with a disability.
  If someone claims Pension credit guarantee credit, the basic entitlement will be the amount they get from that.
• A 35% ‘buffer’– this must be at least 35% of the person’s basic entitlement.
• An additional 10% of their basic entitlement to cover any disability-related expenditure (DRE). Examples could be community alarms, food for a specialist diet or extra laundry costs.

The person will always be allowed to keep this amount of protected income. This is income that can’t be used to pay for care costs. 

They may be able to keep more in some circumstances. For example, this may happen if they have higher disability-related expenditure (DRE) costs. They should speak to their local authority to find out more about these circumstances.

If a person’s income is less than their MIA, they should not be charged for care at home. If a person’s income is over their MIA limit, they can be asked to contribute the amount that goes over the limit. However, they won’t pay more than the maximum weekly charge.

Local authorities may charge a set amount for low-level, low-cost care and support services. This is called a flat rate charge. These services are usually to help people with ordinary day-to-day living, such as meals or laundry costs.

Local authorities are not under a duty to carry out financial assessments for services charged at a flat rate. However, if a person raises concerns about affording flat rate charges, the local authority must carry out a financial assessment.

Other people may be charged flat rate charges as well as their assessed contribution for their homecare. These services do not come under the maximum weekly charge. If all these charges are unaffordable when added together, speak to the local authority. They may take this into account and leave the person with a higher MIA.

If homecare is being funded by the local authority, a person can choose to receive this funding in the form of a direct payment. A direct payment is money that a local authority gives to someone to spend on meeting their own eligible care and support needs. 

The money can be spent on a wide range of products and services, and is intended to give greater choice and control over how eligible needs are met.

For more information, ask the local authority.

The capital limit for permanent residential care in Wales is currently £50,000 (2024 rate).

If the person has more than £50,000 in available capital, they will pay all of their own residential care costs. This is often known as being a self-funder.

If the person has less than £50,000 in available capital, they will not pay any of their care home fees out of their capital. Capital below £50,000 is ignored in the financial assessment. They will still usually pay an assessed contribution from their income. This includes income such as State pension and most benefits.

If a person is contributing to their care home fees, which most people will, they must be left with a minimum amount of money for themselves each week. This is called the Minimum income amount (MIA). The MIA for residential care is less than the MIA for homecare. This is because a lot of the resident’s living costs are covered by their care home fees.

In Wales, the MIA rate for residential care is £39.50 per week (2024 rate).

The person with dementia can spend this money as they wish. It is not a benefit, but the person’s own income, made available to them. This can be used for anything they choose, such as newspapers, haircuts or clothing.

There are some circumstances where the local authority increase the MIA. For example, this may happen if the person has an occupational pension being paid to them. They can keep half of this income to pass back to their spouse or civil partner who is still at home. The local authority must allow this.

The local authority must consider increasing the MIA for other reasons too. For example, the local authority may need to do this to cover some housing costs where the person’s property is disregarded in the financial assessment. 

Local authorities provide some respite care free of charge. If they do charge, it is the person with dementia who is financially assessed. This is true even if it is the carer who needs the break.

Respite care may be provided in a care home. In this case, it will still be subject to the maximum weekly charge if the person with dementia is classed as a short-term resident. 

This usually means their stay will be shorter than eight weeks.

If the person is receiving care in a care home, their benefits may be affected. This will depend on who is paying the care home fees:

• If the person is a self-funder and is paying for their care costs in full, they can still receive some benefits. This includes Attendance allowance or Personal independence payment daily living component. These can help towards paying care home fees.
• If the local authority are contributing towards the care fees, any benefits the person continues to receive will go towards the cost of care. This includes their State pension, or any benefits they claim as an income replacement. In these cases, the person must be left with their MIA rate for residential care. If someone receives funding help with care home fees, some benefits usually stop being paid after 28 days. An example would be Attendance allowance.

The Department for Work and Pensions (DWP) should be informed of any stays in care homes or hospitals to ensure there are no overpayments.

It may help to arrange a full benefits check. Advicelink Cymru or Age Cymru can also explain what financial help is available. The person’s carer may also find this useful, such as to discuss protecting their pension rights.

Learn more about benefits for people affected by dementia.