Financial Assessment for Home Care: What Counts and What You Pay

A financial assessment for home care is how your local council works out whether your parent pays towards the care it arranges, and how much. It looks at their savings and income, leaves them a protected amount to live on, and allows for extra costs caused by disability. Crucially, the value of the home they live in is ignored when care is provided at home.

Local guides: West Sussex | London

If your parent has more than £23,250 in savings and investments, they pay the full cost. Below that, they pay a contribution based on what they can afford, which for many people is less than they fear, and for some is nothing.

In short: the home is disregarded, savings under £14,250 are ignored, savings between £14,250 and £23,250 count as £1 a week of income per £250, and the council must leave your parent at least the minimum income guarantee plus allowances for housing and disability costs.

When does the financial assessment for home care happen?

The financial assessment follows the care needs assessment. First the council decides whether your parent has eligible needs under the Care Act 2014 (see our guide to preparing for a care needs assessment). If they do, the council sets a personal budget: the amount it will cost to meet those needs. The financial assessment then splits that budget into two parts:

Council contribution + your parent’s contribution = personal budget

Usually a financial assessment officer or welfare benefits adviser from the council contacts you to arrange the assessment, and also checks whether your parent is claiming every benefit they are entitled to. Some councils offer an online form or checklist to start with. If your parent chooses not to share their finances, they will be asked to pay the full cost.

Contributions are due from the date support begins, not from when the paperwork is finished, so keep money aside if the assessment takes a while.

What counts as capital

Capital means savings and assets: bank and building society accounts, cash, ISAs, premium bonds, shares, investment bonds in many cases, and property other than the main home, such as a buy-to-let or second home.

These limits have been frozen in England since 2010. Joint accounts are usually treated as split equally between the account holders.

The property disregard for care at home

The value of your parent’s main or only home is completely disregarded when they receive care at home. It does not matter if the house is worth £200,000 or £900,000. This is one of the biggest differences between home care and a care home, where the home can be counted once someone moves in permanently. Our comparison of home care and care homes explains more.

How tariff income works

Tariff income is not real income; it is an assumed amount. If your mum has £18,000 in savings, that is £3,750 above the lower limit. Divided by £250, that gives 15, so £15 a week is added to her assessed income. At £23,250 the tariff income is £36 a week.

What counts as income

The council counts weekly income such as State Pension, private and workplace pensions, and most state benefits. Money your parent earns from work is not counted.

Disability benefits need a closer look:

• Attendance Allowance, and the daily living part of PIP or the care part of DLA, are usually counted as income. If your parent gets the higher rate because of night-time needs but the council is not arranging any night care, ask whether the difference between the higher and lower rate should be ignored.
• The mobility part of PIP or DLA is ignored.
• Pension Credit counts, but the assessment also makes sure your parent is claiming it if entitled.

Because Attendance Allowance can count as income, some families wonder whether to claim it. They should. It is not means-tested, it often increases Pension Credit, and if your parent later pays for care privately, it is all theirs. See our Attendance Allowance guide.

Minimum income guarantee explained

The minimum income guarantee (MIG) is the amount of weekly income the council must leave your parent after charges, to cover ordinary living costs. It is set nationally each year in the Department of Health and Social Care charging circular. Councils can be more generous but cannot go below it.

Couples are each assessed on their own income, with different MIG amounts. On top of the MIG, the council also allows for housing costs, such as rent or mortgage payments and Council Tax after any reduction.

Disability related expenditure and care charges

Disability related expenditure (DRE) is the extra money your parent spends because of their disability or health condition. The council deducts agreed DRE before working out the contribution, so claiming it properly can reduce the charge.

Council guidance typically lists examples such as:

• community alarm charges
• extra laundry and bedding because of incontinence
• special clothing or footwear
• buying, servicing or repairing privately bought disability equipment
• basic garden maintenance and essential domestic cleaning
• higher heating costs because of a medical condition
• internet costs linked to disability, such as safety monitoring
• transport, looked at case by case

You need to tell the council about each expense and provide receipts, invoices or bills where possible. Families often under-claim DRE. Before the assessment, go through bank statements for a couple of months and list anything that exists only because of your parent’s health.

A worked example

These figures are simplified to show the principle, not a real calculation. Suppose your dad is single, over Pension Credit age, and has £10,000 in savings.

• State Pension and a small works pension: £280 a week
• Attendance Allowance, lower rate: £76.70 a week
• Total assessed income: £356.70 a week (savings ignored because under £14,250)
• Less MIG: £241.45
• Less agreed DRE, say £20
• Maximum weekly contribution: about £95

He would pay either that amount or the actual cost of his care, whichever is lower. Housing costs would reduce it further if he pays rent or a mortgage.

What councils pay and charge for home care

Councils rarely publish one standard hourly price for all home care; each pays providers under its own contracts and frameworks, and rates differ. The Homecare Association puts the minimum sustainable price for council-funded home care in 2026/27 at £34.42 an hour. For example, West Sussex County Council’s market position statement (February 2025) gave an average framework rate of £28.66 an hour.

If your parent pays the full cost and asks the council to arrange care, many councils charge an arrangement fee and sometimes a weekly administration fee; West Sussex, for instance, charges £228 plus £7.30 a week. Many self-funders instead arrange care directly with an agency. Visiting home care in England costs about £32 to £34 an hour in 2026 (the Lottie Care Index puts the Q3 median at £33.49), many agencies charge £26 to £38, and prices vary by region; see our home care cost calculator.

Some support is free regardless of means, including reablement of up to six weeks, often after a hospital stay, and minor adaptations costing under £1,000.

Is there a care cap in 2026?

No. There is no cap on care costs in England. The Care Act 2014 cap was postponed several times and the planned charging reforms were cancelled in July 2024. An independent commission on adult social care, chaired by Baroness Casey, is looking at long-term reform, but as of September 2026 no cap or new charging system has been introduced. Any mention of an £86,000 cap is out of date.

Can you claim home care costs against tax?

Generally, no. There is no general income tax relief in the UK for paying for your own care, or for a parent’s care. A few related points are worth knowing:

• Personal and domiciliary care provided by a CQC-registered agency is usually exempt from VAT, so you should not see VAT added to the care itself. Introductory agencies that only supply or introduce carers can be treated differently.
• Disabled people do not pay VAT on equipment designed or adapted for their personal use, such as some mobility aids, when they sign an eligibility declaration.
• If your parent employs a carer directly, they take on employer responsibilities such as payroll and possibly a pension.

For anything involving tax on investments or property used to fund care, speak to a regulated financial adviser who specialises in later-life care funding.

Deprivation of assets

If someone gives away money or property, or spends it unusually, in order to reduce what they pay for care, the council can treat them as still having it. This is called deprivation of assets. There is no fixed time limit; the council looks at the timing and the reason. Ordinary spending, such as home repairs, paying off debts or normal gifts, is not usually a problem. If a large gift or transfer is being considered, take advice from a solicitor first. A Lasting Power of Attorney also matters here, because attorneys have limited power to make gifts.

Before the council visit, use our free funding checker to see which benefits and support could apply, and read our guide on how to pay for home care. Your council’s website has the forms and contact details (for example, West Sussex County Council’s financial assessment page).

Frequently asked questions

Do I have to sell my house to pay for care at home?

No. When care is provided in your own home, the value of your main home is fully disregarded in the council’s financial assessment. The picture changes if someone moves permanently into a care home.

Is my partner’s income included in the financial assessment?

The assessment is of the person receiving care, not their partner. Joint savings are usually split equally between you. Your own income is not counted as your parent’s or spouse’s.

What if we cannot afford the contribution the council asks for?

Ask for a breakdown of the calculation, check that all housing costs and disability related expenditure were included, and ask for a review. Citizens Advice or your local Age UK can help you challenge it.

Does Attendance Allowance count in the financial assessment?

Usually yes, it is counted as income for council-arranged care at home. If it is paid at the higher rate for night-time needs that the council is not meeting, ask whether part of it should be disregarded.

How long does a financial assessment take?

It varies with how quickly paperwork is gathered. Have bank statements, pension and benefit letters, and bills for disability costs ready. Contributions are charged from the date care begins.

The Care Panel is an independent publication. We are not a care provider and are not regulated by the Care Quality Commission, because we do not deliver care. Always check a provider’s own CQC registration and inspection report before you commit.

Written and fact-checked by The Care Panel. Last updated September 2026. Sources: West Sussex County Council paying for care guidance, DHSC Social care charging for care and support 2026 to 2027 local authority circular, House of Commons Library on the cap on care costs, HMRC VAT Notice 701/2, GOV.UK VAT relief for disabled people, Disability Rights UK. General information, not financial, legal or medical advice — figures are indicative and subject to change.

Reviewed by The Care Panel team on 15 October 2026. This guide is general information about care in England, not legal, medical or financial advice. Rules and rates change; check with your council or an adviser before making decisions.