NHS Continuing Healthcare and State Funding for Care
Before any discussion of private funding, it is essential to understand what publicly funded support may be available. NHS Continuing Healthcare (CHC) is a package of fully funded care provided by the NHS for individuals with a primary health need. If a person qualifies for CHC, the NHS funds their care entirely — including residential and nursing home costs — regardless of their assets or income. CHC is frequently overlooked or not properly assessed, and many families pay privately for care when the person may have been entitled to NHS funding.
If you believe a family member may have complex health needs, request a formal CHC assessment from your local NHS Integrated Care Board. The assessment uses a decision support tool covering health domains including behaviour, cognition, communication, mobility, nutrition, and skin integrity. Eligibility is not based on a specific diagnosis but on the overall nature, complexity, and intensity of the care needs.
For those who do not qualify for CHC, local authority means-tested funding may be available. The current capital threshold in England is £23,250 — individuals with assets below this level (excluding the family home in some circumstances) receive local authority funding support. Between £14,250 and £23,250, the person contributes a tariff income. Those with assets above £23,250 are self-funders and meet the full cost of their care privately.
The state pension and other income streams (private pensions, rental income) contribute to care costs for all residents, reducing the net amount that needs to be funded from capital. Understanding the full picture of income available is important before assessing the gap that needs to be funded from property equity or other sources.
The Deferred Payment Scheme and Deprivation of Assets Rules
Local authorities in England operate a deferred payment scheme (DPS) that allows homeowners who would otherwise need to sell their property immediately to fund care costs to defer those costs as a loan against their property instead. This can be useful where the family home cannot be sold quickly or where the person receiving care may eventually return home. Interest is charged on the deferred amount, and the debt is recovered from the estate when the property is eventually sold.
The deprivation of assets rules are critically important for families considering transferring property or other assets before care is needed. Local authorities have the power to treat assets that have been gifted or transferred as if they still belong to the person needing care, if the transfer was made with the deliberate intention of avoiding care costs. There is no fixed time limit for how far back local authorities can look — if they can demonstrate that avoidance was a material motivation, even transfers made many years ago can be scrutinised.
This does not mean that estate planning and wealth transfers are impossible, but they must be done for legitimate reasons — such as genuine family gifting, charitable purposes, or inheritance tax planning — rather than primarily to reduce assessable assets for care funding purposes. Legal and financial advice is strongly recommended before making any significant asset transfers for families where care costs may become relevant.
Families should also be aware that the value of the family home is not included in the means test for the first 12 weeks of care, and is excluded entirely if a spouse, civil partner, or dependent relative continues to live in the property.
