Care Home Accommodation Costs: Funding Options for Care Homes Hereford Families
Understanding what care home accommodation costs typically involve is one thing — actually working through the process of arranging funding is another. Many families find the practical steps more confusing than the underlying concepts, simply because nobody walks them through it in order. This guide focuses on that process specifically: what happens, in what order, when you're arranging funding for care homes hereford families are considering. (If you'd like a fuller breakdown of what fees typically include and national cost averages, see our complete fees guide — this article picks up where that one leaves off.)
Step 1: Get a Care Needs Assessment
Before funding can be arranged, a care needs assessment is usually the starting point. This is carried out by Herefordshire Council's adult social care team, or sometimes initiated by a hospital discharge team if your loved one is currently in hospital. It looks at what support is needed day to day — not finances — and results in a written care plan that identifies the level of care required.
You can self-refer for this assessment; you don't need to wait for a GP or hospital to suggest it. It's free, and everyone is legally entitled to one, regardless of how it will ultimately be funded.
Step 2: The Financial Assessment (Means Test)
Once care needs are established, a separate financial assessment determines who pays, and how much. Herefordshire Council will look at capital (savings, investments, and usually the value of your property, depending on circumstances) and income. As of 2025/26, the general principle in England is:
Capital above £23,250 — usually self-funding, at least initially
Capital between £14,250 and £23,250 — a contribution on a sliding scale
Capital below £14,250 — the council may fund your placement, subject to the needs assessment
This is the point at which many families first realise their situation may fall between categories — worth flagging directly with the assessor if your circumstances are complex (for example, jointly owned property, or a partner still living in the family home).
A note on the £86,000 cap: you may have heard of a planned £86,000 lifetime cap on personal care costs, alongside a rise in the upper capital limit to £100,000. These reforms were cancelled by the government in July 2024 and have not been reintroduced — the current £23,250 / £14,250 thresholds remain in place for 2025/26, with no cap on lifetime self-funded care costs.
Step 3: Be Aware of Deprivation of Assets Rules
Some families consider giving away savings or property before a financial assessment, hoping to qualify for more local authority support. Local authorities can treat this as deliberate deprivation of assets if they believe avoiding care costs was a significant motivation — and there's no time limit on how far back they can look. If deprivation is found, you may be assessed as though you still own the asset (known as notional capital), even though you no longer have access to it.
Ordinary, consistent gifting (birthday or Christmas gifts in line with past patterns, for example) is generally not treated this way — it's sudden, large, or out-of-character transfers made once care needs are foreseeable that tend to raise questions. If you're considering any significant gift or transfer and care needs may be on the horizon, it's worth taking independent advice first, rather than after the fact.
Step 4: Understand the 12-Week Property Disregard
If a property needs to be sold to fund care, its value isn't counted during the first 12 weeks after a permanent move into a care home. This gives families breathing room to decide what to do — whether that's selling, renting the property out, or arranging a Deferred Payment Agreement with the council to delay the decision further.
Step 5: Check Eligibility for NHS Continuing Healthcare
Separately from the local authority process, it's worth asking whether your loved one should be assessed for NHS Continuing Healthcare (CHC) — full NHS funding for care, awarded where a primary health need is identified. This uses a different, health-focused assessment (the "Decision Support Tool"), and is worth requesting explicitly if there's a significant ongoing medical need, since it isn't always offered automatically.
If CHC isn't awarded but nursing care is still needed, ask about NHS-funded Nursing Care (FNC) instead — a smaller, standard weekly contribution toward the nursing element of a placement.
Step 6: Compare Self-Funder and Local Authority Rates
If you're self-funding, it's worth knowing that the rate you're quoted may differ from the rate a local authority pays for a similar placement at the same home, since councils typically negotiate set commissioning rates. If your capital is likely to reduce toward the local authority threshold over time, ask the home directly how they handle that transition, and whether a top-up arrangement might be needed to remain in the same room or home.
Step 7: Consider Getting Independent Financial Advice
Care funding decisions are often one-off and high-stakes, which makes independent advice genuinely worthwhile — particularly around gifting, trusts, or specialist products. The Society of Later Life Advisers (SOLLA) maintains a directory of accredited financial advisers who specialise specifically in care fees planning, rather than general financial advice. Some families also look into an immediate needs annuity — a one-off lump sum paid to a regulated insurer in exchange for a guaranteed income toward care costs for life, which can bring useful certainty if you're worried about outliving your savings.
What If There's No Lasting Power of Attorney?
If your loved one didn't set up a Lasting Power of Attorney (LPA) before losing capacity to manage their own affairs, someone will usually need to apply to the Court of Protection to become a deputy — a court- appointed person with legal authority to manage finances (and, in some cases, welfare decisions) on their behalf. This process takes longer and costs more than registering an existing LPA, which is one of the strongest arguments for setting one up well before it's needed, even if care isn't on the horizon yet.
Which Council Is Responsible? Understanding Ordinary Residence
If a family is moving a loved one into a care home in a different area from where they currently live — for example, moving closer to family in Herefordshire from elsewhere — it's worth understanding "ordinary residence" rules, which determine which local authority is financially responsible for funding. Generally, the local authority where someone was ordinarily resident before moving into care remains responsible, even if the care home itself is in a different council area. This is worth raising directly with both councils involved to avoid delays or disputes over who pays.
What Happens If You Don't or Can't Pay?
If care fees fall into arrears, most homes will raise this directly with the resident or their representative in the first instance, and it's always worth communicating early if a payment issue arises rather than letting it build up. For council-arranged funding, local authorities have formal debt recovery powers, including registering a legal charge against a property in some circumstances, but this is generally a last resort after other options — such as a Deferred Payment Agreement — have been discussed.
Once funding is confirmed — whether self-funded, council-funded, CHC-funded, or a combination — the home will confirm how payments are structured (monthly invoicing is typical for self-funders) and what happens if circumstances change, such as a reassessment after 3 or 12 months.
Step 9: Know How to Challenge a Decision
If you disagree with the outcome of a financial assessment or a CHC eligibility decision, both processes have a formal appeals route. Herefordshire Council can explain how to request a review of a financial assessment, and CHC decisions can be appealed through the local Integrated Care Board. Financial assessment disputes that remain unresolved can ultimately be escalated to the Local Government and Social Care Ombudsman. It's worth requesting the assessment's full written reasoning before deciding whether to appeal.
A Simple Checklist to Take Into Meetings
Recent bank statements and savings information
Details of any property owned, including joint ownership
Pension income and any existing benefits being received
A copy of the care needs assessment, if already completed
A list of questions about top-up fees, if considering a home above the local authority's standard rate
Frequently Asked Questions
Do I need a needs assessment before a financial assessment? Generally yes — the needs assessment establishes what care is required, which then informs the financial assessment and funding route.
Can I ask for an NHS Continuing Healthcare assessment myself? Yes. You don't have to wait for it to be offered — you can request a CHC checklist assessment directly through Herefordshire's Integrated Care Board or via the care home or hospital discharge team.
What happens if I disagree with a funding decision? Both local authority financial assessments and NHS CHC decisions can be formally appealed. Ask for the full written reasoning behind the decision first, as this is usually required to lodge an appeal.
Is the funding process different for self-funders? Self-funders skip the local authority means test but should still confirm what's included in the weekly fee, and may still wish to check CHC eligibility if there's a significant medical need, since CHC funding isn't limited to those who are otherwise council-funded.
Is there still a 7-year rule for giving away assets before care? No — that's a common misconception borrowed from inheritance tax rules. For care funding, there's no time limit: a council can look back as far as it likes if it believes assets were given away to avoid care costs.
Is there still an £86,000 cap on care costs? No. This reform, along with a planned rise in the means-test thresholds, was cancelled by the government in July 2024. The current £23,250 and £14,250 thresholds remain in place, with no lifetime cap on self-funded care costs.
Do I need a financial adviser to arrange care funding?
Not always, but for decisions involving gifting, trusts, property, or specialist products like immediate needs annuities, advice from a SOLLA-accredited adviser is generally worthwhile, given how high-stakes and hard to reverse these decisions can be.
What happens if my parent never set up a Power of Attorney?
A family member usually needs to apply to the Court of Protection to become a deputy, which takes longer and costs more than registering an existing LPA. It's worth setting up an LPA well before it's needed if possible.
Which council pays if we move to be closer to family in Herefordshire?
Generally, the local authority someone was ordinarily resident in before moving into care remains responsible for funding, even if the care home itself is in a different area — worth clarifying directly with both councils involved.
Want help understanding your family's specific funding situation? Contact Whitchurch House — we're happy to talk through the process, even before you've made a final decision on a home.