Who pays for care? The means test explained

The council process has two stages. First comes the care needs assessment, which looks at what help your parent needs day to day. It is free, and anyone can ask for one, whatever their finances. Second comes the financial assessment, the means test, which works out who pays for that help.

Do not skip the needs assessment because you assume your parent will be paying anyway. It creates an official record of their needs, unlocks council support later if their money runs down, and often surfaces help you did not know existed.

For 2025/26, England has two capital limits. Above £23,250, your parent is a self-funder and pays the full cost of their care. Below £14,250, their capital is ignored altogether and the council pays, although most of their income (such as pensions) still goes towards the fees, minus a small weekly allowance for personal spending.

Between the two limits, the council treats capital as producing a notional income: £1 per week for every £250 (or part of £250) of capital between £14,250 and £23,250. Your parent contributes that on top of their income. These limits can change, so check the current figures before making plans.

Capital means most of what your parent owns, including:

• Savings and money in current accounts
• ISAs, shares, bonds and other investments
• Second homes, land and most other property
• In many cases, their main home (covered in the next section)

Some families are tempted to move money or property into children’s names before the means test. Be very careful. If the council decides your parent deliberately gave assets away to avoid care fees, it can treat them as still owning those assets. This is called deprivation of assets, and there is no time limit on how far back the council can look.

Genuine gifts made years earlier, when care was not on the horizon, are a different matter. If in doubt, get advice from a solicitor or a specialist financial adviser before moving anything.

The house is the biggest worry for most families, and it is not always counted. If your parent’s partner still lives there, the home is disregarded entirely. The same applies where certain other people live there, for example a relative aged 60 or over, or a dependent child. And if your parent receives care in their own home rather than a care home, the house is not counted at all.

If your parent moves into a care home permanently and the house does count, the 12-week property disregard applies. For the first 12 weeks the council ignores the value of the home, which gives you breathing space and means the council may help with fees during that period rather than forcing a rushed sale.

After that, a deferred payment agreement can let your parent delay paying. The council effectively lends the money for care, secured against the home, and it is repaid when the house is eventually sold, often after your parent dies. Interest and administration fees usually apply, so ask the council to set out the full terms in writing.

If the council is funding your parent’s place and you choose a home that charges more than the council’s usual rate, someone else (a relative, friend or charity) can pay the difference. This is a third-party top-up. Your parent cannot normally pay their own top-up, except in limited situations such as during the 12-week property disregard or under a deferred payment agreement.

Only agree to a top-up you can afford for years, not months. If the payments stop, your parent might have to move, which is exactly the upheaval you are trying to avoid. When you compare options, check which homes the council’s rate would cover. Browsing care homes near your parent and comparing different regions is a sensible starting point.

Attendance Allowance is paid to people over State Pension age who need help with personal care, and it is not means tested. Self-funders in care homes can usually claim it, and it is worth claiming even if your parent has substantial savings. Be aware that people whose care is council funded usually lose it after 28 days in a care home.

Depending on income, Pension Credit and other benefits may also apply. A benefits check costs nothing and takes little time. Age UK and Citizens Advice both offer them, and they regularly find money families did not know they could claim.

Two NHS schemes ignore savings completely. NHS Continuing Healthcare can pay the full cost of care for people whose needs are primarily health needs, whatever they own. And in nursing homes, NHS-funded nursing care pays £254.06 per week (England, 2025/26) directly to the home, for self-funders as well as council-funded residents.

If your parent has serious or complex health needs, look into both before assuming they must pay for everything themselves.

Scotland: personal care is free for those assessed as needing it, and there is a contribution towards nursing care. Accommodation costs are still payable and are means tested, with capital limits that differ from England’s.

Wales: uses a single capital limit for residential care, set higher than England’s thresholds. Northern Ireland: the system is broadly similar to England’s. In every nation the figures change over time, so always check the current limits with the local authority (or, in Northern Ireland, the health and social care trust).