Who Pays for Care Home Fees in the UK? The Means Test, CHC and the Thresholds That Decide

Care home fees UK families face routinely exceed 1,000 pounds a week, and the single question every family asks first is the same: who pays for care home fees, us or the state? The answer turns on two systems that most people meet for the first time in a crisis: the local authority means test and NHS Continuing Healthcare. Understanding both before you sign anything can be worth tens of thousands of pounds. Here is how the rules stand in 2026, with the figures as published on gov.uk and in NHS guidance. This article is general information, not legal or financial advice.

Who pays for care home fees: the three possible funders

Every placement is paid for by some mix of three sources. First, the resident, as a self-funder. Second, the local authority, after a means test, usually with the resident's income contributing. Third, the NHS, which pays the whole package where the person qualifies for NHS Continuing Healthcare (CHC) or pays a nursing contribution where they need nursing care. On the question of care home fees UK who pays is never decided by the care home; it is decided by these assessments, which is why the order you approach them in matters.

The care home funding threshold in England

The means test is built around two capital limits, and this care home funding threshold pair has been unchanged since 2010, according to gov.uk:

Capital means savings, investments and usually property, though your home is disregarded while a spouse, partner or certain dependants still live in it, and for the first 12 weeks of a permanent placement. A word of caution on headlines: the planned reform that would have lifted the upper limit to 100,000 pounds and capped lifetime care costs was cancelled, so the 23,250 pound figure still rules in England in 2026. Scotland, Wales and Northern Ireland set different limits and Wales uses a single, higher threshold.

Care home fees when money runs out

The most stressful scenario is the self-funder whose savings are draining away. The rule of thumb for care home fees when money runs out is: do not wait until the money is actually gone. Ask the council for a financial assessment when capital is heading towards the 23,250 pound line, several months ahead, because assessments take time and councils will not automatically backdate support. When it comes to paying for care home when money runs out mid-placement, families should also check the home's position early: some homes charge self-funders more than the council rate, and a move or a top-up conversation is better had in advance than in arrears. Relatives can choose to pay a top-up so a resident stays in a dearer home, but nobody can be forced to.

Deferred payment agreement: using the house without selling it

Where the home does count as capital, a deferred payment agreement (DPA) lets the council pay the care fees now and reclaim the money later from the sale of the property, usually after death. The debt is secured by a legal charge on the house and interest and administration fees apply, so it is a loan, not a subsidy. According to gov.uk, councils in England must offer deferred payment agreements to people who meet the criteria, broadly those whose other capital is below the threshold but who own a qualifying property. A DPA buys time: it prevents a forced sale at a bad moment and keeps options open, but the bill still arrives eventually, so compare the interest cost against renting the property out or selling in an orderly way.

NHS continuing healthcare checklist: the funding most families never claim

NHS Continuing Healthcare is the outcome that changes everything: where a person's needs are primarily health needs rather than social care needs, the NHS funds the entire package, care home fees included, and it is not means tested. Your savings and house are irrelevant to CHC eligibility, per the national framework guidance on gov.uk.

The route in is the nhs continuing healthcare checklist, a screening tool that a nurse, GP, social worker or other professional completes. You are entitled to ask for one whenever there is an apparent health need, and hospital discharge and care reviews are natural trigger points. The Checklist deliberately sets a low bar: it does not decide funding, it decides whether a full assessment must follow.

CHC checklist assessment: how the full assessment works

Screen positive and the process moves to the full chc checklist assessment stage, built around the Decision Support Tool (DST). A multidisciplinary team scores the person's needs across 12 care domains, including behaviour, cognition, mobility, nutrition, continence, skin, breathing and medication. The scores inform a recommendation on whether there is a primary health need, and the Integrated Care Board makes the funding decision. Families can and should take part: attend the DST meeting, bring evidence of needs on bad days as well as good ones, and ask for written reasons. Decisions can be challenged through local resolution and, beyond that, an independent review, and unsuccessful applicants can be reassessed later if needs increase. Even where full CHC is refused, a person in a nursing home may still get NHS-funded nursing care, a weekly NHS payment towards the nursing element of the fee.

How to avoid care home fees UK: what is legal and what is not

Search results for how to avoid care home fees uk are full of schemes, so be clear about the line. Legitimate steps include claiming every entitlement (CHC, NHS-funded nursing care, attendance allowance), making sure the means test disregards are applied correctly, using the 12-week property disregard, and taking a deferred payment agreement rather than a distressed sale. What does not work is giving away the house or savings to qualify for council funding: councils apply deprivation of assets rules, and where they conclude that avoiding care fees was a significant motive for a transfer, they can assess you as if you still owned the asset, with no time limit on how far back they look. Paid schemes promising to shelter your home from the means test deserve deep scepticism and independent advice before any signature.

The order to do things in

• Ask for a CHC Checklist before agreeing any self-funded placement, and again whenever needs increase.
• Request the council needs assessment and means test in writing, and keep copies of everything.
• Check which disregards apply to the property before assuming it must be sold.
• If capital is falling towards 23,250 pounds, contact the council months ahead.
• Compare a deferred payment agreement against selling or letting the property before deciding.