Permanent residential care financial assessment calculation - 12-week property disregard
Joel has had several falls recently and is no longer safe living alone. He owns his own property and has modest savings and a reasonable income. Following assessment, it was agreed that he needs permanent residential care.
For the first 12 weeks of residential care, the value of Joel’s home is disregarded in his financial assessment. This is known as the 12-week property disregard.
Joel has chosen a care home costing £1,750 per week. The Council will fund up to £1,600 per week, leaving a shortfall of £150 per week, which Joel pays as a top-up from his savings.
Joel has a financial assessment to determine how much he must contribute towards his care.
Joel’s financial assessment for permanent residential care is calculated as follows:
Step 1: Weekly income calculation
Joel receives:
- State Pension: £292.60
- Army Pension: £202.10
- Prudential Pension: £65.60
Total weekly income: £292.60 + £202.10 + £65.60 = £560.30.
Step 2: Capital and tariff income
Joel has the following capital:
- Santander Current Account: £1,262.00
- Santander Easy Saver: £4,000.00
- Santander ISA: £12,134.00
Total capital: £1,262.00 + £4,000.00 + £12,134.00 = £17,396.00.
From this capital, Joel is assessed with tariff income of:
- Tariff income: £13.00
Total income including tariff income: £560.30 + £13.00 = £573.30.
Step 3: Housing costs deduction
Joel continues to pay the following housing cost:
- Buildings and contents insurance: £5.96
Total housing costs: £5.96.
Total income after housing costs deduction: £573.30 − £5.96 = £567.34.
Step 4: Personal Expenditure Allowance
Joel must be left with a Personal Expenditure Allowance (PEA) of £37.70 per week for personal items.
Total income after PEA deduction: £567.34 − £37.70 = £529.64.
Final result: Required contribution
Following these calculations, Joel is required to contribute £529.64 per week towards his care and support.
As Joel receives Attendance Allowance at the higher rate (£110.40 per week), this remains in payment for the first 28 days. During this period, his contribution is increased.
Initial contribution (first 4 weeks): £529.64 + £110.40 = £640.04.
After the first four weeks, Joel’s contribution reduces back to £529.64 per week for the remainder of the 12-week disregard period.
Once the 12-week property disregard ends, Joel will become self-funding. If he enters a deferred payment agreement with the Council, his income contribution will remain at £640.04 per week, and he may retain more of his income once the agreement is in place.